Dames. Ladies and gentlemen. A very warm welcome to this annual general meeting of shareholders of PostNL. As chair of the supervisory board, I will be chairing today's meeting. Now, we live in interesting times. Firstly, because of the situation in Belgium. On Monday, the March 20, we were astonished by an act of Belgian justice system targeting PostNL people in Belgium and also the delivery staff and other delivery companies who deliver packages in Belgium. Two depots have been sealed, and a number of our staff have actually been arrested and have been imprisoned for more than a week already. We are supporting everyone involved as much as we can. In addition, we face the war in Ukraine, the increasing fuel prices, and high inflation rates. Herna and Pim will deal with all these points in rather more detail shortly.
We've also got to bear in mind that the COVID has not disappeared, although only very few restrictions remain. The virus's future cannot be predicted. Because safety and health are our number one priority, we have put a number of measures in place, as we have in our operating locations, in order to guarantee safety and health. We would ask you please to bear these in mind and to consider each other's interests. In order to make sure that all shareholders can participate in the meeting, we chose to have a hybrid meeting this year. Shareholders who have registered to attend online will be able to vote during the meeting as they could last year, and they'll also be able to ask questions during the meeting using the chat function. All members of the Supervisory Board and the Board of Management are here today.
Although I would say at this point that other than myself, the other members of the supervisory board are participating online. You can see them on the screens to your left and right. In addition, our Notary Public, Ms. Cremers. Online, we have our external auditor, Ms. Overbeek of EY, attending the meeting. She is responsible for auditing PostNL. In addition, next to Ms. Overbeek, we've also got Mr. Niewold from EY, also present online. He signed the auditor statement regarding the non-financial performance. A warm welcome to them all. I'd also like to welcome the chair and the representatives of the Central Works Council and the representatives of the PostNL Continuity Organization. Welcome to all of you, whether you're here with us or participating online. The Central Works Council has said they do not wish to avail themselves of their right to speak at today's meeting.
Hannie Vlug is also with us online because of a proposal to nominate her, which is on the agenda for today. A warm welcome to her as well. Next to me here we have the Board of Management, Herna Verhagen and Pim Berendsen, and our secretary, Ewout de Wit. He's to my left. Ewout will be taking today's meeting minutes, and they will be made available on the PostNL website. In accordance with the Corporate Governance Code, the draft minutes will be available no later than three months from now. You will then have three months in which you can comment on them. After that, the secretary and the chair of the supervisory board will adopt the minutes. If you wish to receive today's minutes or by post at home, you can email Ewout with that request.
You will find his email address in the notice convening today's meeting. Now, moving on to the formalities of today's meeting. The meeting was convened in accordance with the law by a publication on PostNL website and a press report dated March 8, 2022. The registration date was the March 22, 2022. At that time, the complete agenda with all supporting documents was made available for inspection and for you to download in accordance with the rules. The exact attendance register and the number of votes that can be cast at today's meeting is not yet known. I'll come back to that point at a later stage in today's meeting. What I can tell you is that there are currently 513,252,013 ordinary PostNL shares at issue.
On the registration date, PostNL itself held 3,444,060 shares. The number of shares entitled to vote, therefore, is 509,807,953. I therefore conclude that all the formalities have been observed so that valid decisions can be made on every issue. Now, there's a slight time lag in the webcast, which means that the voting is open all through the meeting, and we will close the voting only at the end of the meeting. This means that it's only at the end of the meeting that we will see the results of all voting agenda items. It's not at the end of each agenda item that we'll know how the votes have gone. We will remain in suspense for all the voting outcomes until the end of the meeting.
A couple more practicalities. If you have any questions about PostNL services, please address your questions to PostNL customer services. As is the case every year, part of the presentations you'll be seeing on the screen today is in English. This is for the benefit of our foreign shareholders who are following the webcast of the meeting. The meeting is in Dutch today, and everything is being interpreted simultaneously. We have enabled shareholders, if they wish, to tell us about their questions in advance so that we can give them a proper answer at today's meeting. For each agenda item, we will firstly address those questions sent in advance, and where we can, we have bunched questions together.
Now, everyone who's in the room, could I kindly request you, please, to ask a clear question of the people who are here at the table, and please do not ask more than three questions per agenda item. I'd also ask you, please, to state your name clearly before you put your question forward. That's for minuting purposes. Finally, people who are attending the meeting online will be able to ask their questions using the chat function. You have logged on using the ABN AMRO system, and you can use the chat function in that to ask questions on all agenda items. If you wish to do that, could I emphatically request that you have a specific question to the people here at the table today and to ask a maximum of three questions per agenda item.
I'll also ask you, please, to state your name clearly before asking your question. This, again, is for minuting purposes. Questions submitted by the chat function will be clustered together where possible for reply. You may not see your own question verbatim. If a question comes in which we have already answered, we consider it to have been answered, so we will not answer the same question twice. Finally, this is a hybrid meeting today, and it's a novelty for all of us, but we hope that things will go smoothly. If online participants have any idea after the meeting is over that their question has not been answered, then I would invite you, please, to get in touch with us. Now, we can move on to the board report of 2021 and discussion of developments in the financial year.
First of all, I'll ask Herna Verhagen, the Chair of the Board of Management, to run us through the main events of 2021. Pim Berendsen, who's our CFO and Member of the Management Board, will then go through the 2021 financial situation. Here, they will also deal with PostNL's ESG policy, our expectations and ambitions for the future, the impact of the Ukraine war, and all geopolitical events, and also, of course, they'll address the situation in Belgium. It now gives me pleasure to invite Herna and Pim to take the floor.
Welcome to the PostNL annual general meeting today. I'm glad we're here meeting in person today. It's been a long time, and I'm pleased to see that all of you look younger than ever, so that's a good sign, too. I'd like to talk about 2021 today, as well as about 2022, because quite a bit has happened already this year, and of course, that requires some elaboration. Let me start with 2021, as you can see on this slide. First, the PostNL staff worked really hard, as did our partners and our retailers. In 2021, once again, COVID-19 had a strong impact. We delivered a strong operational performance in post and parcels. We processed huge volumes. I'll talk about those in a moment.
We also see that, especially our staff and the fact that they managed to maintain the network throughout the pandemic, the result was good operational and financial performance. Millions of parcels were transported in the Netherlands and Belgium, as well as millions of postal items in the Netherlands. We connected millions of people, and that's part of our strategy. We connect. In doing so, we focus on all stakeholders by exploring growth. In the past couple of years, our company derives 70% of its revenue from e-commerce logistics, and we post annual growth. Digitalization has accelerated. This is crucial to maintain our competitive edge going forward. Of course, we've launched initiatives in our surroundings and socially, so environmental and social initiatives. I'll provide some examples during this presentation.
Now, once again, 2021, especially the highlights that we also presented at our presentation of quarterly results. The Q1 of 2021 was one of the optimal synergies from the consolidation of Sandd that started in 2019. During that same quarter, we announced our Digital Next program, which addresses the acceleration of digitalization. To this end, we've set aside EUR 80 million. That's both OpEx and CapEx. From 2023, it should support our normalized EBIT. We initiated rolling out the automated parcel lockers, and our objective is to have 1,500 in place by 2024. It may seem like a long time, but in 2021, we also completed the sale of our Italian company to Poste Italiane.
In Q2, we saw a clear step up in e-commerce, so that means that there were far more parcels, and this led us to open our 26th parcel sorting center. In the summer of 2021, we also announced that we would be investing an additional EUR 450 million, in part in expanding parcels but also to accelerate greater sustainability. It's important that that investment of EUR 450 million is not simply a one-off investment. It will be adapted according to the growth in parcels. In Q3 of 2021, we opened our 1st fully automated robotic sorting center, and we're very proud of it. It's in Nieuwegein, and it's suitable for small parcels. In that small parcel sorting center, robots do the sorting. In that same quarter, we reached an agreement on a new social plan with the trade unions as well.
In Q4, we announced the share buyback, and Pim will tell you more about that. We provided some examples of digital transformation. For example, the fact that 85% of our roll containers now have beacons. Those are trackers that tell us where our roll containers are and enable us to plan a deployment in our sorting centers, and we've simplified our different product codes. We also received some awards in ESG. One is the Dow Jones Sustainability Indices, where we made it into the top 5 of all logistics companies in the world. We also received an award for our leadership in climate. 2021 was a year in which we greatly strengthened our already solid financial position. This slide shows the results from 2021, which we communicated in early March. Revenue growth was 6.5%. Our normalized EBIT exceeds the...
Well, it's near the top of the guidance at 308, which was growth of 23.6% compared with the previous year. Our free cash flow grew significantly. We exceeded the previously communicated guidance, as well as the not normalized comprehensive income is 42.2% higher than the year before. This too exceeded our guidance. Dividend per share, which is obviously on today's agenda, is proposed at EUR 0.42, and this includes the interim dividend distributed during the summer. Now, back to our strategy and our progress. The strategy has been communicated previously. It's not new. The purpose of our firm is that we aim to deliver special moments, and our ambition is to be your favorite deliverer, and our strategy is to be the leading logistics and postal service provider into and from the Benelux region.
We try to accommodate our core business in the Benelux with many flows into and out of the Benelux through our Spring company. If you consider execution of our strategy, you'll note that we do this in part through three clear proposals. One is within Parcels, which concerns managing profitable growth. We do that in part by focusing on our customer interaction and in part by accommodating the e-commerce growth that we see and accept, and by managing and expanding our capacity. Within Post, we manage for value, and we announced that strategy the moment we acquired Sandd. Managing for value means that we position mail clearly in the value chain. During COVID-19, we saw, especially in direct mail, increased interest by purely digital companies such as Uber Eats.
We aim to keep PostNL accessible, and that should yield a strong EBIT and strong cash flow. Digital Next is the third pillar of our strategy. We added that last year. It's important for transforming our commercial engine as well as helping our operational organization to curtail costs and to be a platform in logistics. You'll see our clear strategic objectives on this slide, such as helping our clients grow and ensuring an accessible postal market and recruiting and retaining people, improving our impact on the environment, and of course, generating profitable growth while retaining our highly motivated workforce. ESG figures prominently there. That's environmental, social, and governance. In environment, we focus on clean kilometers and of course, on network efficiency, because network efficiency means that you don't want to cover as many kilometers.
We also focus on sustainable buildings and facilities, having certified buildings that are also CO2 neutral, and we want green products and services. We aim to realize the full potential of people who work with us and for us, in part by strengthening employee engagement and satisfaction. We do that by focusing on health and safety. We did this during the COVID-19 pandemic. For two years, we were open and operated our networks without major corona outbreaks. We need to change within Post and Parcels, and we try to manage our capacity as best we can. Governance figures prominently, as you'll see in our annual report. We have a two-tier board system, as you know, in the Netherlands, and we engage in clear dialogue with our stakeholders annually in group and individual discussions.
We have clear business principles which we describe in the annual report as well. We're also part of the UN Global Compact. I'd like to zoom in on a few of our results. If you look at the number of highly satisfied customers, we see a modest decrease from 2020 to 2021, and that's due mainly to how busy we were in parcels and post. If you consider employee engagement and satisfaction, that's high at 84% and remains the same as it was in 2020. Despite COVID-19, we see that absenteeism due to illness increased by 0.1%. It's at about 6%, which is slightly higher than if we were not in a COVID-19 year. It's still encouraging. As for environmental, we've become more efficient in our carbon emissions.
That's down from 249 to 203. That's a decrease of 18%. You can see that on the emission-free last kilometer, we're at the same level as we were in 2020. Some of the acknowledgement concerning ESG leadership appear on this slide as well. I'd like to say a bit about social value here. I'd also like to mention Belgium. 53,000 people work for PostNL. 70% work for us directly, 30% works indirectly for our hub delivery professionals. Most of them are employed with an employment agreement. I'll say a bit more about this in a moment. The staff at Post work entirely for PostNL, and those working for parcels work 30% for PostNL and 70% for our delivery partners.
90% of our employees have an employment agreement and have a collective labor agreement. That's a PostNL CLA or a B2B CLA. PostNL stands behind its standards and values and aims to comply with legislation regulations. That means that all the publicity in recent months is hurtful to us. We wake up and see it, and we notice it before we go to sleep, and it impacts us. That's because there's a huge difference between what we see as the reality versus the impressions you get from the newspapers.
That's why I'd like to say a moment about this based on facts and based on the example that I just provided, how it impacts me and how it impacts us and 53,000 people, because they all feel that they're being held accountable despite the 53,000 people trying day after day to do their level best for PostNL. Now, let's take a look at the facts. As indicated, 53,000 people work for us. 70% works directly for us, and 30% works indirectly for us. This is the distinction between the Netherlands and Belgium. In the Netherlands, altogether, 50,000 people, 50,650 employees. 29,000 work for PostNL and 7,700 work for our parcels company. They have a collective labor agreement for PostNL or the collective labor agreement for postal deliverers.
These are all CLAs reached with the trade unions that represent PostNL, for example, the FNV and CNV. 13,850 people work indirectly for PostNL, so they work for our delivery entrepreneurs and are subject to the sector BGV CLA, and that was also reached with regular trade union confederations such as the FNV. In Belgium, a total of 2,350 people work for us, 550 work for PostNL, and 1,850 people work via our delivery partners. That's 220 delivery partners, and they're Belgian SMEs. Overall, 90% of the parcel drivers has an employment agreement, and 75% of the parcel drivers in Belgium has an employment agreement and works according to terms of employment agreed with the unions.
Sometimes that makes things complicated, and it's also hurtful to see what is sometimes written about PostNL, and especially to see how that impact the 53,000 people who do their best day in, day out to deliver the post. In Belgium, first of all, e-commerce is growing rapidly, and we're trying to support that growth market. You've already noticed some of this. 93% of the delivery partners we work with in Belgium is satisfied to very satisfied about the working relationship with PostNL, the legal framework where we work. The legal foundation is used in many sectors in Belgium, not only transport firms, but also at the Antwerp Harbor, and aligns with what you would ordinarily see. We have very rigid controls. We already had them in place.
Following the initial publications last year, we've tightened them further so that we do 100% checks at the gate every morning. Now, looking at the serious accusations, we disagree with them, and all the checks that we conducted do not substantiate these accusations. We stand behind the people in Belgium. Sometimes it's difficult, but we trust them. We trust the legal process, and we trust the independent investigation that is currently in progress. All our sites are open, and parcels are delivered every day, and we try to support them as best we can. Now, environment. We have clear objectives for 2025 and for 2030. A few of the targets that we've achieved appear here. As do the ones that we are heading toward.
During the COVID-19 period, you see that sustainability, I would almost say, became even more important than it was two years ago. We acknowledge that and identify with that, and that's one of the reasons why we are investing EUR 60 million-EUR 70 million additionally in making our organization sustainable. Our parcels business is growing rapidly, and you see that here. In 2021, as in 2020, we saw strong growth in packages and an increase in online buyers, which reveals growth of parcels heading into the future and an increase in the number of web shops that also underlies parcel growth in the future. We're increasingly working to place consumers in control. At the end of the day, you and I, as consumers, receive those parcels and want to decide where, when, and how we receive them, and we're working on that.
For example, thanks to the app and by enabling consumers increasingly to indicate in that app where, when, and how they would like to receive their parcels. We launched a process in Digital Next to continue improving our NPS scores, thanks to an agile working method, and we've launched some customer journeys to that end. What's important in parcels is to expand capacity, and we did that in the Netherlands by opening the 26th parcel sorting center, and we have 2 new distribution depots in Belgium. In March, we also opened the first NLI in Belgium. It remains important in the future in terms of capacity expansion and investments to balance the number of actual parcels at the time with the investments necessary to be able to deliver those parcels.
Now, mail in the Netherlands, that went through an exceptional year in which the decrease was 0.3%, and I can't remember in the past 10 years of having a year with virtually no decrease in mail. That's in part because of COVID-19. The government sent out a lot of mails for vaccinations and awareness campaigns to raise awareness among the public as to what COVID-19 is and what you can do about that. We also see that direct mail volume increased as well. It was an exceptional year with very good results. I think it's important within PostNL and within mail in PostNL, we know that over time, in the long run, volumes will continue to decline, so we're preparing to cut more costs.
You see that on the right column of this slide in which we explain how we'll be adapting our organization in part by greatly reducing the product portfolio. We've gone from 2,200 to 200 products, which means less red tape, for example, and we've also improved sorting and preparation processes. It was also an exceptional year for our mail company. We also focused on the digital transformation, and we'll be investing EUR 80 million between 2021 and 2024 at the front end of the organization, so within commerce. We do that in our logistics and operations, and we're also doing that on the platform where we're active and aim to expand. Those EUR 80 million that we'll be spending on OpEx and CapEx are not only about e-commerce, it's also about improving our IT foundation.
We need to improve that to pursue ongoing digitalization in the future. Now, this transition to digital channels is visualized on this slide. You see rising figures that reflect the difference between 2020 and 2021. If you look at the number of online visitors, so the number of unique visitors on PostNL's website in 2021, over 1 billion visits happened to our website. We're up from 6 million to nearly 7 million PostNL consumer account users, and there's a lot of value in terms of personalizing the parcel service that we provide. In many areas we see that transition to digital channels and products, and it continues. We're on track executing our strategy that between 2018 and 2021 established a very solid financial foundation for a company that gave us the opportunity to invest and to accelerate digitalization.
Also gave us the opportunity to accelerate investing in sustainability, social aspects, and of course in expanding capacity in parcels. That was my section done.
Thank you very much, Herna. Now I'm pleased to give the floor to Pim.
Thank you, Jan. Thank you very much, Jan, and good afternoon, everyone. Now, let's have a slightly more detailed look at the financial side of things in 2021 and the outlook for this year. Well, to start off with, I think it's important to talk about the normalized EBIT over 2021. This ended up at EUR 308 million, which is towards the top of our range. It's important to point out that roughly EUR 82 million out of that EUR 308 million consisted of what we call non-recurring impacts. That is to say we've had money to identify things from our products and so on, which are basically COVID related. EUR 40 million of that is clearly in the Parcels segment, and 26 of that is Parcels Netherlands, and EUR 15 million is within Spring and Logistics.
42 million was assumed to be non-recurring, Mail in the Netherlands. If we correct for that and we look really at the core of 2021, we've got EUR 226 million result corrected for non-recurring items. Now, we achieved that because we delivered 384 million parcels in 2021. That was a colossal achievement. 38 million of that is assumed to be non-recurring. On the mail side, as Herna said, there's virtually no downturn at all. We sent out more than 2,000 mail items, of which 67 million are assumed to be non-recurring. That is to say, COVID-related letters about inviting you to get vaccinated. You need ID documents.
People haven't got the things, so a lot of post created the whole vaccination program, which led to a minimal downturn in volumes in mail. Looking now at segment by segment, where within parcels, almost 14% of growth in volumes, 384 million. With turnover looking very. That's EUR 2.3 billion. Normalized EBIT EUR 230 million, while it was EUR 209 million the year before. That's EUR 21 million improvement. Thanks to good operating performance, operational efficiency, but also really good logistics and improvement in logistics. We could basically say that there's two sides to this year regarding Spring. The first half of 2021 was very good for Spring. An awful lot of e-commerce growth from Asia and Europe.
From the July 1, 2021, onwards, the low value of VAT was abolished in the E.U., which meant that cheaper products were much less appealing and far fewer of them were purchased in the second half of 2021, and that had a real impact on the second half of 2021. Then in addition to that, towards the end of the year, we had significant supply chain issues because of friction in the cargo markets. It was difficult to get goods from China to Europe. It was a lot more expensive, and this led to Asian web shops being much less competitive than European ones or Dutch ones. That also had a bit of a negative impact on Spring. All in all, it was a really good performance within parcels.
If we now move on to our other segment, Mail in the Netherlands. Well, here we can see, as Herna said, volumes are down by 0.3%. EUR 67 million of that is one-off non-recurring income. With substitution, essentially. Substitution of physical volumes. It's still about 5% going from physical to online purchase if you correct it for the non-recurring COVID factors. It's important to note we expect the downturn in volumes to continue into the future, which means we're gonna have to carry on finding ways of cutting costs in the Mail in the Netherlands in order to keep things going. Normalized EBIT EUR 160 million in 2021, of which roughly EUR 40 million is non-recurring.
What's also important on the revenue side, we sold Cendris Customer Contact in 2020, so that won't show through in the revenue and EBIT figures in future when we talk about Mail in the Netherlands. Now, when it comes to our performance in 2021, we can see that we had a lot of volume, but cost cutting to about EUR 26 million is part of the end result. As Herna said, at the beginning of this year, we had the integration of Sandd, which has non-recurring costs, and that had a positive effect of EUR 29 million compared with the previous year. Now, having looked at results, I think it's also important to have a look at one of the other financial metrics. This is cash flow.
We can see 308 is a nice figure, but that came together with very high performance on free cash flow. 308 normalized EBIT result, and this led to 288, EUR 288 million free cash flow. You can see that's the last line on this slide. Compared with 186 last year. I think it's worth looking at this. You can see one further orange stripe just a little further up the graph. Free cash flow before exceptionals, EUR 238 million in 2020 and EUR 304 million in 2021. Below that, there are two unusual transactions there. We've got the sale and leaseback transaction, which produced EUR 148 million in 2020, and we had a contribution to pensions, EUR 200 million.
That leaves us then 286 as the figure at the foot of the slide. 186 for 2020 and 288 for 2021. Now, we've gone through the main factors here. You can see CapEx going up because of increasing capacity and also, speeding up computerization and our ESG performance. Positive turn in working capital. 41 million released. You can see also the normal items there on the sheet. We come up in a very strong position. This cash flow has contributed to our net debt in 2020/2021. We've strengthened our position here by roughly EUR 240 million, from EUR 407 million net debt to EUR 203 million net debt.
If you look at the leverage ratio, the way we're funded, in other words, you can see that it's only about 0.4 of difference. That's important because, as we told you earlier, we have a special capital allocation funnel. We call it a roadmap, which we use to look and to see what are we paying, what is happening as a result of the achievements of transformation in PostNL. One thing we're doing, of course, is seeing where we can focus our investments in order to keep PostNL as competitive as possible. That's the first step in this funnel. The second stage is in stepping up our computerization program. We want to have a distinctive customer experience. In other words, we want to be a really different service provider compared with our competitors.
That means that we are investing in the digital side of things. We also want to get new proposals onto the market as quickly as possible, and we want to have operations as efficient as possible by using IT, using data, and also looking at new opportunities. Those are the first two steps in the capital allocation funnel. The third is to get a good dividend for our shareholders on the basis of our dividend policy, which is 70%-90% payout ratio. Finally, we're looking at the options to strengthen PostNL's portfolio further and look at possible acquisitions out there, which in future could lead to growth opportunities. Now, if there's still some leeway on the balance sheet after that, we could then look at seeing whether we can use that to offset the dilution effect of the dividend policy.
That means a very strong cash position, very strong cash flow. That was strong in 2020 and 2021. As we said, the share buyback is coming in two slices. The first EUR 160 million-EUR 170 million is to be carried out now, and the second slice will be 2023. The effect of that is that actually dilution for shareholders who receive their dividend in shares is offset by a buyback of more or less the same number of shares. Now, that goes on to have a positive knock-on effect in the earnings dividend per share to the tune of roughly EUR 0.03-EUR 0.06 in the 2022-2024 period. Currently, you can look every Tuesday morning at our website. The investor communications section tells you how things are going with our share buyback program.
This morning it's on 11.8 million shares bought back out of the roughly 51 million, which we plan to buy. That's roughly EUR 41 million-EUR 42 million that we've spent out of our tranche of EUR 160 million-EUR 170 million. What about the outlook for 2020? Here we had a look at the market on the February 28, this year and sketched out a view for the future. For the normalized EBIT, we're expecting EUR 210 million-EUR 240 million. Compare that with 226, which is corrected for non-recurring COVID items in 2021. Regarding free cash flow, we're talking about EUR 110 million-EUR140 million. Normalized comprehensive income, roughly EUR 200 million. That is in line with the normalized EBIT curve.
What's important here is that at the end of February, and indeed it's still the case now, the impact of the horrific war in Ukraine is still really unknown. Of course, we can see the impact in terms of energy prices. We can see inflation going up. What it will do in the longer term, what will it do to disposable income, what will it do to economic growth in the Netherlands, and what will it do therefore for the growth possibilities of our company? Well, we just don't know yet. This is the outlook that we came up with on the February 28. Of course, we'll keep an eye on what actually happens in the future. That was my last slide, Jan.
Thank you very much, Pim. Now, in a moment, I'll give Koos the floor.
I'd just like to emphasize once again that the Supervisory Board is enormously impressed by the Board of Management's performance in the last year, and also the executive committee and all the other PostNL staff all around the world. PostNL has been able to work flat out to deliver mail and parcels in a responsible manner, while at the same time protecting the health and safety of our staff, because that is our number one priority and always has been. Tremendous performance. We in the Supervisory Board think we can be really proud of it. I'll now give the floor to Koos Timmermans, Chair of the Audit Committee, who will be running you through things from their point of view. Koos, the floor is yours.
Okay, thank you very much, Jan. Well, as the chairman said when introducing today's meeting, Ms.
Overbeek is the person finally responsible for auditing, and Mr. Niewold is also here today. He's the person who signs the non-financial performance statements from the auditors. Well, this year, once again, the Audit Committee and the Supervisory Board and the Management Board have had very positive talks, both within meetings and outside them. We looked at the quality of financial administration and all the internal and external reporting arising from it. The same applies to our findings when we looked at the internal control framework, the internal audit department, and also what EY thinks. We particularly focus obviously on the operational and financial impact of COVID-19 for PostNL. Other recurring issues discussed again and again in Audit Committee meetings were the most important financial factors having an impact on the strategic current rollout and the financial result curve for PostNL.
The interpreter can't hear the speaker.
I'll continue. Says the chairman, Jan Nooitgedagt, as unfortunately, Mr. Koos Timmermans is inaudible. Very well. I'll continue now. After all, I'm a member of the Audit Committee as well. You have to wait a moment. Other recurring topics in the Audit Committee were the main financial factors that influence executing the strategic plan and the development of PostNL's financial results, such as volume, progression pricing, cost margin changes, competition, investments in economic and market developments, and so on and so forth. As well as IT and cybersecurity were discussed regularly, as were the risk assessment in strategic, operational, financial, and compliance areas, including adopting the risk appetite and determining key control measures. We also discussed the development of specific accounting topics regularly and regulations concerning financial reporting.
We also talked about how to follow up on the actions for improvement that related to the internal audit and the external audit in 2020 concerning internal control, including developments relating to automation and findings in 2021. Obviously, consideration was given to investments in capacity expansion of parcels and the discontinuation of the low VAT exemption as of July 1, 2021, innovating with the revolving credit facility and the share buyback program, as well as improving working capital. In addition, equity dividend and dividend policy, pension liabilities, the sale of Nexive, as well as the tax review and tax planning were discussed. The Audit Committee also has ongoing discussions about integrity in which possible fraud and alerts by whistleblowers are addressed.
Based on the analysis shared with the Audit Committee, we've concluded that in 2021, no material fraud cases were observed. In addition, the Audit Committee and the Supervisory Board together with the Board of Management mentioned EY's findings, and the Board of Management was open and transparent in explaining the findings and discussing any measures with us. In addition, the chairperson of the Audit Committee, as well as other Supervisory Board members, regularly spoke with EY and the head of the internal audit without the management present. EY's most important findings appear in their statement that appears in our annual report from page 228. This year, EY's audit was largely conducted remotely, and discussions and meetings largely took place online.
A COVID-19 protocol has been drafted in consultation between PostNL and EY for the year-end audit process, which has clearly improved structure. The Audit Committee once again believes that the Board of Management, in its decisions and actions, took a realistic approach. The Audit Committee appreciated the open and constructive disposition of the managers, and the findings by the auditor match this. Thank you very much for listening to this. Now, I hope that this will work. This would be difficult to do myself. I would hope to give the floor to our auditor, Mrs. Overbeek. Thank you very much. Can you hear me? Mrs. Overbeek.
Good afternoon, ladies and gentlemen. I'm pleased to take this opportunity to elaborate on the audit that we've conducted relating to PostNL's annual report for 2021.
I'm Hanneke Overbeek, and since 2017, I've been the EY partner in charge of auditing PostNL. As indicated previously, the content of the financial statements is the responsibility of the Board of Management and Supervisory Board, and they've already discussed this. I'm responsible for auditing the financial statements, and I will address the audit by the auditor. Of course, afterwards, I'll be happy to answer any questions that remain. As in previous years, we issued two statements. One was an auditor's opinion for the financial report, which you'll find on pages 228 and beyond. We also issued an auditor's opinion for non-financial information as appearing in the annual report on pages 237 and beyond.
The auditor's opinion for the financial reporting was issued by me, and the auditor's opinion for the non-financial information was issued by my coworker, Jan Niewold, who is also present online. I'd like to tell you about the approach and the special areas of consideration regarding both and also discuss the main conclusions, and I'll make some concluding remarks that in my view, are relevant for you as shareholders. Now, 2021 and our audit were still marked by COVID-19, and in our risk assessment, we explicitly considered the COVID-19 risks and monitored this throughout the year. Once again, we conducted a large share of our duties remotely, and we conducted alternative activities to enable working remotely, for example, checking documents electronically, and we convened a lot of meetings via digital media.
Before we start our audit, we inventory what, in our view, are the most important developments and risks, and we define the materiality, which denotes the maximum possible deviation in PostNL's figures without our auditor statement requiring amendment and adjustment. For 2021, we set the materiality at EUR 15 million and based this on the operating income. Audit differences exceeding EUR 750,000 were shared with management and with the supervisory board. Based on this risk-driven approach and materiality, we determine which duties need to be performed for which business units. Auditing the Dutch business units was done by our own Dutch team, and the audit of the entity in Hong Kong was done by our local EY coworkers on-site there.
We instructed our local coworkers as to which duties they should perform, and we also discussed the work that they performed and assessed it so that we were able to take responsibility for auditing the corporate financial statements. We also involved various experts in our audit, including experts in appraisals, properties, tax matters, IT, and pensions, and valuations. In our statement this year, we reported at length about our work concerning broad risks as well as the risk that the firm might not comply with applicable legislation and regulations. To assess fraud risks, we consulted our fraud experts, and we also reviewed the processes and audits of the firm and made selections during our audit below our materiality to identify any unpredictability in the audit.
Regarding the risk of non-compliance with legislation regulation, we consider first which regulation would directly and then which regulation would indirectly impact the financial statements. As for the indirect legislation regulations such as labor law in Belgium, we took note of correspondence with regulatory institutions as well as with external legal professionals, and determined whether the firm had explained this sufficiently in the financial statements. The most important risk areas that we identified in our audit are the Key Audit Matters. We discussed these in addition to several other topics as mentioned by the Chair of the Audit Committee, or in this case, the Chair of the Supervisory Board. We discussed them periodically with senior management, the Board of Management, and the Supervisory Board.
We also discussed in what measure climate risks should be a separate key audit matter in the PostNL audit and concluded that the investments required by the firm to meet the climate targets set by PostNL are sufficiently accommodated in the business plan. This business plan, in turn, underlies assessing the ventures or rather evaluating investments in subsidiaries. The key audit matters in 2021 were accruals in relation to revenues and the valuation of investments in subsidiaries. Also new investments, and these appear in the corporate financial statements. Last year, we mentioned sorting centers as a key audit matter. This year we didn't discuss this because there were no sale and leaseback transactions in 2021. Nor did we identify the impact of COVID-19 as a key audit matter.
Over the course of the year, we discussed the impact of this and the corresponding risks repeatedly with management and concluded that valuation of debtors and other financial assets were of limited relevance for the financial valuation of PostNL. In our audit statement, we included additional information about these key audit matters, such as the risk that we identified in these items and the selection of the most important audit activities in these items, as well as our main observations. Additional details about the key audit matters appear on pages 243 through 245 of the annual report. As indicated, in addition to auditing the financial report, we checked whether the non-financial and other sustainability information as included in the financial report meet the international guidelines applied.
This means that we determined whether the non-financial information accurately reflects the policy, activities, events and performance in sustainability. We checked the reliability, calculation of some performance indicators, such as CO2 emission by others. We also determined that these most important indicators had been sufficiently explained in the financial statements. Finally, we assessed the other aspects of the annual report, such as the business report, the Remuneration Report, the governance section, as well as the other data. You may have read that we have provided unqualified audit opinions for the financial statements, including the non-financial information and statements. This means that based on the audits that we performed, we've concluded that these items have been properly included and explained in the financial statements and that no additional, material audit discrepancies needed to be entered. Estimates by management are inherent in drafting the financial statements.
The estimates by management in the context of drafting the financial statements are balanced and consistent, and we have no difference in insight with the management in this respect. As for the material aspects of sustainability information in the non-financial information, we conclude that this information is accurately reflected. In addition, we assessed information in the annual report and have determined that no material inaccuracies appear here. Now, some concluding remarks. We have an open and discerning relationship with management. Our remarks and recommendations are discussed and as needed, followed up by management. We also have an open and transparent relationship with the Audit Committee and the Supervisory Board, and we frequently report on our findings, both in writing and orally. In addition, we regularly have individual discussions with the chairs of the Audit Committee, as well as the chair of the Supervisory Board.
2021 was, for me, personally, and for EY, the final year of auditing PostNL financial statements. From 2022, KPMG will succeed us, and they have already had a look at our work to streamline the transition. Thank you very much for your confidence in us in recent years, and I'm pleased to give the floor back to the chairman. Thank you.
Thank you very much. My thanks for that extensive presentation. Now we have an opportunity for questions. We received a number of questions in advance, but the people who raised the questions say they will ask them in person at the meeting. Of course, we will give you answers. Who shall I give the floor to? I know there's a lot of hands going up. Let's start at the front of the room. Would you please give us your name and please, as you know, no more than three questions.
Number 8.
Thank you, Chairman. My name is Stevens from the Foundation for the Legal Protection of Shareholders. First of all, I'd like to thank you for the very good performance over the past year. Now, of course, there are questions regarding Belgium, which must be asked. I'm personally involved in this. This is the second time that we've had this question arising, and one depot opened and was closed again. Now, I've had some experience of Belgian drivers, and we know that sometimes don't go as smoothly as they might here. The rear of the vehicle can be damaged. Sometimes, they reverse two meters at a time. We haven't really got the impression that they are qualified to be drivers.
That might sound rather harsh, but yes, it seems a bit. We're not sure what's going on here behind the scenes. We'd like to have a bit more openness, transparency of what's happening here in Belgium. To give us your view and give us a response to that. Next. You were talking about. Just a moment, please. Yes, your delivery stuff. Delivery companies. I wonder if you could tell us what you mean when you say delivery companies. Then the sorting offices in Belgium. Well, I've been into one. And I've got their phone number. In fact, I could go for a ride with them and see how they work. Here in the Netherlands as well, we've got a number of small sorting offices. One of them is between customs and a residential area.
Are you going to be carrying out any reorganization of that side of things? Next. The Sandd takeover. Now, I keep seeing articles telling us that there are some legal issues here. It's all settled down now. We're wondering, what. Well, how shall I put it, what still awaits settlement? I wonder if we could be told something more about that.
Yeah.
You're already up to your three questions.
Yes, you're quite right. I've had three questions.
Would you please take a seat, and we'll start by answering your questions and then give others a turn to ask questions. I think that, Herna, most of those questions, if not all, are for you. First, Wommelgem and Willebroek are now open again after having been closed down in early April. Every morning, a full inspection takes place at the gate, and that means that all the IDs of people who work for us are checked, including driver's license. Delivery professionals are Belgian firms, SMEs, delivery partners, and they generally employ various people, which can vary from 2 or 3 to 10 or 15. They employ people who drive for them. We contracted 220 delivery partners in Belgium, and about 1,500 parcel drivers work for those delivery partners. That's the balance. They're not...
There's not an equal number in each delivery partner. As for whether we're going to change the distribution in sorting centers, we've opted for the NLIs, the new logistic infrastructure, that's NLI, because then we're closer to the points of issue, so we don't have to drive as many kilometers from the sorting centers to where the package is distributed. We have 26 sorting centers, and we're going to open a 27th soon. We want to be closer to the consumer. That way, you don't drive as many kilometers, and you don't emit as much carbon dioxide. We did not intend to reorganize, but this is a deliberate choice from the past. If you consider the small parcel sorting center that we opened in Nieuwegein, we do process larger volumes there.
Now, as for Sandd, the appeal based on Article 47, according to which in 2019 the minister decided to allow the acquisition of Sandd, and the court in Rotterdam reversed that decision. The minister took a new decision in 2020, and an appeal has been filed against that one, and that's what is still pending. We hope that around the summer, we will receive the judgment in that on appeal. We still have a question from the chat. I'm not sure you can read it.
What will be the next part of the mail process that will be outsourced to subcontractors? Mr. Gerritsen.
Um,
Well, in the Netherlands, if you're talking about the mail process, the mail deliverers work for PostNL, so we have not outsourced those. The only type of partnership we have there is with social workplaces. In Post, we work with social workplaces in some places in the Netherlands, using people at those social workplaces to deliver the mail. As for parcels, parcel delivery in the Netherlands is done in part by our own people, about 30% of that, and part has been outsourced to delivery partners, about 70%. We do not intend to increase that share. Thank you very much. Mr. Van den Bos.
Good afternoon. My name is Van den Bos. A question. You spoke very fine words, but there's one thing you overlooked. Either that, or there's a lot of criminals here in the room. If I can quote what the Belgian judicial system said, they would talk about staff. Yes, fair enough. How do you think shareholders feel if we, if we are shareholders of a criminal organization? Shareholders, after all, own the company, don't we? I'd just like to say, well, all of us would appear to be accessories to a crime. Now, on my next point. Just a moment. The EUR 450 million for increased sustainability and computerization. If I understood you correctly, that is not actually a budgeted amount. It's an amount it might be, but it might be EUR 300 million.
It could be EUR 350 million. My next point, Belgium. Now, the well-known minister, Ms. De Sutter in Flanders, received an email from me because I felt extremely offended to be labeled a criminal, and I'm sure that applies to many other people in the room. To cut a long story short, Ms. De Sutter basically replied that it's not just PostNL and the people who work there, but there's a lot of other companies as well, including GLS, UPD. Another thing she said was that, how shall I put it, Belgian legislation is just not good enough. To put it in blunt terms, if we get a new speed limit on the motorway, you're only allowed to go 80 instead of 100 km/h, and that'll come in next week. You get a week's notice.
What's happening to PostNL in Belgium, as far as I can understand from my reading, and I've showed the text to many people, and I'll be happy to send it to Mr. De Wit as well, just so he can take note of it. Well, they're playing politics in Belgium. Now, I don't know whether that's a fair accusation. I don't know. I have sent documents on to Het Financieele Dagblad. I'm sorry to say they didn't do anything with them. Well, I think it's newsworthy. It comes from Minister De Sutter, who's in the hot seat, and I think action should be taken. That's all I want to say for the time being. Thank you.
In my view, you hold shares in a decent company, and that's what I started out by saying. With clear standards and values and business principles and desiring to comply with legislation and regulation. That's the foundation. We've been working that way for 120 years. The EUR 450 million is not etched in stone. I said a bit about that, as did Pim. That money is being spent according to actual growth in parcels. Of course, you always estimate what you expect for parcel growth until 2024 based on trends and conversations with clients. You do the actual spending when the growth occurs and exactly how much it will be, Mr. Van den Bos. I can't tell you that here, but very clearly it's not etched in stone.
Okay, I have a small addition, perhaps, about that EUR 450 million was in addition to an envisaged investment level that we were planning. It was supposed to be about EUR 450 million, and it could increase to about EUR 900 million until 2024, and is largely a function of growth in parcels, as Herna says. Our ESG-related investments are included in that, such as the rollout of automated parcel lockers, APLs. There are a great many investment decisions that we will keep assessing with respect to their added value. If it's not necessary because we have capacity, then it's always nice to use existing infrastructure to facilitate growth. It's also logical. If you project expected growth, then you have a duty, in our view, to state the expected corresponding level of investments.
We need to be as transparent as possible in both earnings and cash flow. That's how you should see it, and we can take the, what we consider to be the appropriate investment decision based on the growth that we see. As for your final question, yes, in Belgium, new legislation is indeed pending, but we're focusing on running business in Belgium to ensure that if people work for us in Belgium, that we employ them correctly. I think it makes little sense to engage in politics.
May I just respond briefly? I fully understand that you don't want to get involved in the political side of things. That makes sense, of course. I can do so, though, and I would just say that it's some kind of political game being played in Belgium. Thank you.
Thank you. Yes, please go ahead.
Yes, good afternoon. I'm Liesbeth van der Kruit. I'm here from the VEB, VBDO. We've been coming to the PostNL shareholders' meeting for many years now, and we always enjoy engaging with you and with the other shareholders. Now, today, there's three topics I'd like to speak about. When it comes to PostNL, while working conditions in the chain, there's no way around this. It's a very hot topic, climate change and biodiversity. Now, working conditions in the chain has been discussed before. You said it's a very difficult situation. It's difficult for you as an organization. We understand that. You are right to give it your attention. But we shareholders, particularly in the VBDO, are really unhappy about the possible damage to your general reputation, whether it's justified or not.
It's possible that your reputation could be harmed, and we'd like to see something done about this. Rather more punchy action taken than so far. Now, saying you were paying attention to the organization. We think it could also be worthwhile to talk about the people who are actually on the receiving end of the events currently underway. What I'd like to hear, something you could tell us about your future attitude, how you're going to be able to deal with this better and more carefully in the future. Second topic is climate change and greenhouse gases. Now, of course, there's the Sustainable Development Goal 12. We like referring to that one. You are taking a lot of action on the climate front already. I would like to express our appreciation of what you've done.
We're delighted to see it, of course. You've got a good score on the sustainable development front and on the Dow Jones. That's very good. We would like to challenge you to take things even further and improve your impact even further. This presents you with business opportunities, and in fact, you said that. You said that sustainable delivery options give you opportunities. You identified this as one of the most relevant topics, in your words. That's very interesting, and we certainly hope that you really will be able to have an effect on that front. We would be glad if you could tell us more specifically what you're actually going to do. How are you going to put this idea into practice, and what impact is it going to have? The third topic, biodiversity. Yes, now, that might seem not particularly relevant to PostNL.
I could imagine that might be the initial response, the Sustainable Development Goals 14 and 15. In fact, the World Economic Forum said in its 2020 report that biodiversity is one of the top 10 risks for companies. We really would like to see more specific information on what the role of biodiversity is for you and what impact it has. Now, you said in your report that you promote the protection of biodiversity. We'd like to know what is the potential risk or what is the dependency and where we might have business opportunities arising from biodiversity on the other side of things. I'm thinking, for example, of the impact of IT. IT is an important issue 'cause you operate a lot with motor vehicles.
You said you're working here on your buildings as well, but I imagine there's a lot of other opportunities where it would be possible for PostNL to identify risks and dependencies and then also opportunities. We'd like to hear more about that. Thank you.
Thank you. Thank you for the questions. Your first question is to take action and to be thorough about communication, and we strongly support this, but we always try to strike a balance between protecting the interests of our employees in Belgium on the one hand versus making our observations and ideas explicit. As for being explicit about the social policy, we aim to apply it, and the values we represent, I can certainly commit to that. However, we will continue to protect our employees. It's a fragile balance in some cases, especially given the current situation. As for increasing the impact, for example, by examining sustainable delivery options, they matter to us. The Automated Parcel Lockers exemplify this.
There are other delivery options, such as giving consumers a choice in when do you want your parcel so that you know somebody's home and you don't have to make several trips. We'll disclose more about that. That's no problem, because we're very proud of some of those delivery options. Now, to disclose the exact improvement to impact for each delivery option is not always easy, but we'll do our best there. As for biodiversity is not part of our materiality analysis as one of the key audit matters. We're more focused on reducing CO2 and other things. Nonetheless, we do notice that biodiversity is important in debates, not only in Davos and the Sustainable Development Goals, but also in the E.U. taxonomy. We'll be noticing it more there as well.
It means that we're certainly working on it and will continue to do so. In 2022 we'll be conducting the initial risk analysis there. We're involved in a lot of initiatives that I can tell you are all conducive to biodiversity, but we still have to perform that actual risk analysis, and we'll be doing that then. Thank you very much for that very full reply. Please go ahead.
Good afternoon. I'm Robert Fraker from WeConnect You Public Affairs and Investor Relations. I've got a number of suggestions and questions. I'm delighted to see PostNL's good results. I think that current events in Belgium really is not at all part of PostNL's corporate culture. What I think is excellent is that PostNL is now in the top 5 when it comes to sustainable development in the Netherlands. PostNL achieved that and can improve it even further with investments. I'd like to give you an example. I was at the Ahold meeting, and I said to Wouter Kolk, "It's all very nice. You're going to do home deliveries.
If you could do that with PostNL, because PostNL is now using electric bikes, which is sustainable, and with basket bikes, because you are good at supermarkets," I said to them, "and PostNL is good at delivering." He said he would have a word with Herna Verhagen about this. I'd like to know whether he's already phoned you. Have you heard from him? Secondly-
What is your question?
Well, I don't know. I don't know whether Herna will be able to go into that further. PostNL could take on a great deal of grocery deliveries, I think, because PostNL is very good at making deliveries. Secondly, being the Benelux's favorite delivery company, various items of mail can be delivered, but I think if you look at Greetz, for example, they are dealing with a huge increase in cards being sent, for example. Perhaps PostNL could buy Greetz. I think that's a suggestion. I wonder whether it might work. What can PostNL do on that front? Another point, something which is really a shortcoming for PostNL is sponsoring. There's no large-scale sponsoring of football or skating or whatever, but sponsoring is very, very good for a company's name recognition and image.
Look at KPN, look at Ahold, and all the other top Dutch companies. That could do something to boost PostNL's standing. When it comes to biodiversity, well, you could consider sponsoring Artis. The zoo, for example. Artis zoo is EUR 15 million in the red at the moment. Perhaps PostNL could do something on that front. There's art. There's a lot of art organizations in the Netherlands, art fairs. The Tefaf, the KunstRAI. Perhaps PostNL could get involved in sponsoring them because there's an awful lot of works of art are sent as parcels to those art fairs. This could be very profitable, I think. Two more things, actually. Cybercrime. Yes, everything's data-driven these days. That means that if PostNL is hacked, then everything will grind to a halt.
I'd be interested to hear what your views are on this and also what the auditors think about this. Next, inflation and price explosion. The whole world is affected by this. We can see that with COVID. We can see it from Ukraine. There are people at the door of the hotel who are talking about the EUR 14, EUR 15 is it? They think that that's what the staff should be earning. I think that looking at current inflation rates and the massive increase in fuel costs, I think that's actually not very much. I wonder if you could look at ways of addressing that issue. Perhaps you could get together with other organizations, the public sector and so on, to see what can be done. That's my specific question. Thank you.
Herna, or perhaps you and Pim can share those questions. Very good. I'll answer the four questions, the first four questions about cost inflation and some others. I'll be speaking with Wouter Kolk soon, so then I can take that on board in our conversation. I believe that the acquisition of Greetz. Greetz is distributed via PostNL, and in my view, we need to stick to what we do best. That means that Greetz and Hallmark are specialized in manufacturing and selling greeting cards and encouraging people to send cards at special moments. We specialize in delivering those cards. We often team up for that, based on the Wenskaart foundation. We promote Make-A-Wish cards, and we do that on special days such as Valentine's Day, especially around Christmas. We work together extensively with the greeting cards business. Now sponsoring, that's a good question.
All questions are good, but this is especially good. We often have discussions about that. That's because PostNL has deliberately opted to spend the money that we have available every year on good causes. We support various good causes in the Netherlands, including the Stichting Jarige Job, which is about birthday celebrations for the children in the Netherlands whose parents don't have much money. We deliver parcels so that those children can celebrate their birthday, hand out something in class, and we also provide them with gifts.
We have a big campaign every Christmas and ask families who purchased gifts for their children that they know the children will not use, may give them to the parcel deliverer unopened or bring them to a postal service point, after which we will give them to the children whose parents don't have money to give them gifts. There's another type of sponsoring for the fund for the elderly. We've basically decided to enhance our company's social profile and to use our people and network to contribute to that, to the society in that respect rather than standard sponsoring. Another example is the coalition against loneliness, where parcel deliverers and parcel drivers who are interested help identify lonely people in the Netherlands. They can call a certain number, and then that's followed up by the municipality.
We see that we're active in 10 municipalities in the Netherlands and are doing a lot of good things there. We're considerably curtailing social unhappiness. It depends on how you decide to invest your money. We're supporting several social initiatives rather than cycling, skating, and football. As for cyber and inflation, Pim will take that one. Now, cyber is indeed a risk that we're monitoring carefully. We have a very intricate network at retail points and many other places where we're connected with our IT systems, and our team works daily to monitor and protect cybersecurity standards and to enhance them whenever we see developments around us that require this. I can't tell you exactly what we're doing there, but this would include penetration tests and seeing which connections are open.
We have an important security layer surrounding them to ensure continuity of our most important networks. We check this several times a year because we see year after year, day after day, that we need to raise our standards because of the risks, and we're extremely active in there. Now, the final question you asked was about the soaring costs, i.e. inflation. Whenever you check the newspaper, you see a new inflation figure, and much of that is driven by imported energy and fuel costs. With respect to that part of inflation, it's almost impossible to predict what will happen over the medium or long term because the analysis that I see and read indicate inflation at a level of 2% or 3%, no more than that.
In 2022, that is certainly going to increase because of the cost of energy, and we're going to see how we can accommodate that. We're also going to see to what extent we can adjust our pricing policy given the contracts we have. As for labor costs, as Herna mentioned, 90% of our employees work according to collective labor agreements, where we talk about wage progression with the social partners, and we will continue along that line. I think that answers question six.
Um,
Well, I've got two further points on cybercrime. Now, the professional teams, the professional hackers find their way in everywhere. The second thing is the government. The government is often very insecure. Imagine that someone hacks into the national tax service, and the whole country will go bankrupt and PostNL will go bankrupt. It's really serious business. These hackers have got more money for IT than the government has. It's an important issue, and I think that business should perhaps consider giving government a helping hand. That is something to bear in mind, because if the balloon goes up, it'll be trouble for all of us.
Mr. Fekkes, I propose because we need to restrict the scope here to PostNL. Our auditor can see whether it checks, and we can ask her whether. We're going to ask Ms. Overbeek, who is with us for the last time this year. We're going to ask her whether we're sufficiently protected and whether we have taken enough measures for protection. Hanneke, can you take that question? Yes, I certainly can answer that question. As part of our audit, we examined procedures and how the firm has used cyber practices. The firm has procedures to acknowledge risks that are present and to address reporting and following up on any cyber incidents. We don't test those measures, but we have taken note of all documentation.
I think it's important to know, as Pim just indicated, it's important to have measures that keep you slightly ahead of the game. Very clearly, hackers are ongoing. They keep getting better and better. By continuously identifying the risks, we remain alert, and PostNL can continue to focus their measures actively on the hackers as they've done in the past as well. Thank you. Next, the lady wearing the orange shirt. I kept looking past you.
I'm Susan Rietveld. I work at PostNL. As you see from my orange outfit, I deliver the post in Utrecht. I'm an active member of the FNV Trade Union, and that's why I'm here, because the FNV is a shareholder in PostNL, so that we can ask questions at meetings such as today. That's why I'm here. That's my background. Now, I would like to ask a question about page 15 of the annual report. Your view of the materiality matrix. Now, here it said in 2020 there was a nice matrix showing something about living wages, and I can't see that in the materiality matrix for 2021. My question is, where's it gone? Rather following on from the previous speaker, I think that you're the third biggest employer in the Netherlands. I think that after the army and the police, it's you.
I think you have to make sure that you. What is it? 20,000 people, 18,000 post delivery staff you've got working for you on the minimum wage. I earn EUR 10 an hour. Now, we could have an endless debate with shareholders about whether that's gross or net, but I think everyone can agree it's not very much. A question to Pim, perhaps. Does he know how much he earns per hour? It's well, it's rather the contrast between the lowest and highest earners. What's the situation in PostNL? It's probably somewhere in the annual report, but I couldn't find it. Third question. We are told regarding parcels, 70% of them in the Netherlands go via contractors, subcontractors. I didn't hear anyone saying you want to get that percentage down.
Now, bearing in mind what I can see in the cross docks, migrant labor, short-term contracts, people who have been working on a short-term contract for 10 years and can't get a long-term contract. I'm not only talking about delivery staff. I talk about people in sorting office, other behind the scenes people. What are you doing about this? How do you see a way of improving your, the social facet of the company? As far as I can tell, you must improve it a lot because I see that side of things. Thank you.
Yeah. I think if you're talking about the materiality matrix, health and safety figures very prominently because of the COVID crisis and all the measures that we took in the past few years to give people a healthy work setting during the COVID-19 pandemic. That's what you see at the top of materiality. It varies year by year, and what is material depends on the year. Health and safety figured prominently during the COVID-19 crisis. As for the wages we pay, those relate to our negotiations with unions, both for mail deliverers and the PostNL CLA that covers parcel deliverers and our delivery partners are negotiated by TLN, Transport en Logistiek Nederland. We also reach agreements with them about terms of employment as well.
That there is inflation, as Pim indicated, and that this impacts disposable income, obviously figures in the negotiations and is certainly a factor in what we offer the trade unions, because we also see that certain changes are necessary there. If you look at disputes about remuneration, as you mentioned in the annual report, I'm not sure on exactly which page, but it was in the remuneration page. Ewout is checking. He may be able to tell us in a moment. You'll find the difference between my salary and that of the average person paid the least in the organization, as well as the difference between Pim's salary and the average person paid the least. I believe that it's a ratio of 1 to 23 or 24 in my case. With Pim, it's 1 to 18.
That's page 101 in the annual report. If you're talking about parcels and the 70%, then in our CLA, we reached agreements with the trade unions about reducing deployment of flexible staffing. I've mentioned that about 90% of all people who work with and for us have an employment agreement. We're talking about the remaining 10%, and we have reached various agreements with trade unions. For example, in 2021, we employed nearly 600 temporary staff. We gave them jobs, and we also made an offer to certain mail deliverers that had temporary employment contracts. We offered them permanent employment contracts. About 1,400 employees took us up on that offer.
Aside from the flexible layer that we have being only 10%, of course you can argue whether that's a thick or a thin peel, but you need some flexibility to accommodate peaks and troughs in our company. That's one. Two, we reached agreements wherever we can to reduce any flexibility we have, and we do that through these types of measures. Van den Bos?
My name is Van den Bos. Now, to respond to the speaker from the FNV trade union, and your talks with Mr. Kolk or Kolk. Well, eight years ago, we discussed this, the possibility of delivering shopping. I think it was Peter Klaver was in charge at that point. You know, delivering people's shopping. There was a test carried out in Limburg province, and it didn't work out well. Just bear that in mind when you're talking to Mr. Kolk. Coming back to what the trade union delegate said. Now, if I'm in difficulties, I can send emails out to my network. I said it. I've in fact written to the chairman of FNV trade union, and I was told that both in parcels. Well, parcels in particular. PostNL delivers, pays its delivery staff better. Mail, I'm not sure.
You're paying more than any of your competitors, DHL, TPG seems to be even worse.
The interpreter can't hear the speaker from the floor.
Where's your question? Yes, yes. I'll ask one. But first, I've got a further comment. PostNL has come up with excellent performance figures, and I'm very pleased to see that 'cause there were so many years of wailing and gnashing of teeth. It's even better to see, now I must break my word here. Who'd have thought it? To quote your name. That you'd actually have a share buyback. I've got a question. Well, I'll call Hanneke. The management letter. Here we can see a reduction in the number of major issues. What I'm not happy with when it comes to the auditing carried out by EY and others, and I raised this issue with Ordina because EY is auditing there as well. It always seems to me to be a bit of a box-ticking exercise.
What shall we investigate? If we look into it in more detail, then we can see a slip of paper with boxes to tick. That's my question to Ms. Hanneke Overbeek.
Thank you. The first were comments rather than questions. Yes?
Yes, they were comments. Yes, indeed. That's something to bear in mind when talking to Mr. Melkert. Was it Mr. Melkert?
Ach ja.
Eight years ago, you had a trial run, and it didn't work. The gentleman from WeConnect You was saying the delivery services delivering for supermarkets, all the delivery services are loss-making. That's why some of them have stopped.
Thank you. I'll allow Hanneke to answer the question as to whether the number of items in the management letter has decreased or not. I also heard a question as to whether we do more than simply check things off. Well, I thought that was so obvious that I decided not to add that. No, but I'll take that on board as well. If you look at the management letter over the past year, we certainly see a decrease in the number of items. I think you can distinguish in our management letter between findings concerning internal controls. Aside from that, in accounting, I think that in recent years, there were some very difficult accounting issues upon the sale of some entities that were the deal did close this year, but the books were carefully scrutinized in recent years.
In recent years, there was a decrease in the number of items, specifically because management follows up on what we raised in previous years. We appreciate that trend. As for your second question, when I started talking about our audit, I said that we always start our audit by looking at developments in a company and trying to see which risks apply, and that drives our audit. We look specifically to see what's relevant for the organization and focus our audit on that. I would say that we do more than tick the boxes. We broaden the scope to see what's relevant for that organization and attune our duties accordingly. Now, we have quite a few questions. The gentleman over here. Yes, you have the floor, sir.
Yes. I've been waiting to speak for some time. My name is Henk Rieks. I've got three things that I'd like to raise today. The first thing concerns me very much. How are your contacts going with normal members of trade unions? You can discuss things and agree things with the trade union bosses, and you say, "Oh, that's a very fine agreement." But what about the actual trade union members? I think there's a great deal of dissatisfaction about what their leaders have agreed with you. My question is whether it really makes sense to get the trade union bosses to agree to something which the people who actually do the work for you aren't happy with.
Might it not be better for you to talk more often to normal trade union members like the lady who was speaking a moment ago rather than to trade union leaders who never have to deliver parcels? Second point, you've recently got involved in white goods delivery. You'd just taken over a company where they deliver washing machines to private homes and connect them all up. That's really a very different matter from delivering a parcel and then being back in your van ten seconds later. I can't help wondering to what extent you can really get synergy from those two activities. A washing machine is an enormous thing. It's bigger than the things that a normal personal delivery worker is allowed to deliver.
I can't stop wondering what kind of synergy you can have since taking on this white goods, the household appliances deliveries. Next, postage stamp prices. Now, you've agreed together with the government that the prices are going to not go up, and EUR 6.75 per parcel has not gone up. But here it makes it difficult for you to achieve any further performances. Business prices, most of what you deliver. If we're going to say EUR 0.96, then there's a limit to what you can do. I feel disadvantaged as a shareholder that you agreed to freeze prices.
Was that really a very good idea, bearing in mind the massive fuel increase, fuel price increases and dissatisfaction among trade unions and inflation, which might lead to further wage increases? I think that was a bad bet on negotiating to agree not to put the price of a stamp up. I'd like to know what your views are after the event. Now, if you won't be cross with me, I'd like to make a fourth point. I'm just thinking about these delivery companies you deal with. Now, how can people doing this ever save enough money to be able to buy an electric delivery van in a few years' time? Or are you planning to help people? Give them a financial helping hand so that they can get themselves an electric delivery van.
As I see it, we're never gonna get anywhere if they've got to pay for a delivery van on the basis of what you're currently paying them. I wonder really whether what you're doing for the delivery companies is right.
Just for this once, I'll overlook that. Okay, here we go. First, about contact with our people. Yes, we maintain that in part by riding along with our deliverers and participating in our regular meetings, and we include that in our schedule three or four times a week because it's important for us to remain in touch with the people who work for us so that we know what the issues are. Especially because only this limited share of people employed by PostNL belong to trade unions. Now, back to your question. At the end of the day, trade union mergers have designated the trade union executives to negotiate for them. So they're the representatives that we interact with, and I hope that within the BVPP, CNV, and FNV trade union confederations, the debates are conducted if trust is insufficient.
All we can do is work with the trade union executives that are tasked with PostNL. I understand that. PostNL negotiates with the trade union representatives, and I hope that the PostNL employees who are members of that trade union communicate sufficiently with their union representative. Yes, I hear what you're saying. As for household appliances, you're entirely right. Household appliances are not compatible with parcels. There's too much discrepancy between size and weight. For a great many years, PostNL has run Extra@Home, which is a distribution organization dedicated to transporting heavy products that you generally need two people to deliver and install them at homes. We do install washing machines, dishwashers, and so on.
The synergy that we achieve is that you add more volume by acquiring that company. The synergy is not in an ordinary parcel network. You're right. It's a different network that PostNL has that's dedicated to heavy products. As for increasing the cost of stamps, as part, sending a parcel costs EUR 7.25. That's the current price. Okay. You're doing something special. The standard price of an insured post parcel is EUR 7.25. I think the commercial stamps are subject to the Postal Act, which means that we have to observe a few rules. We have the opportunity to increase the cost of stamps by about half of the rate of inflation, plus half of the declining volume, if we do not exceed a return of 9% on our universal services.
Last year, we exceeded that percentage, so we had no opportunity whatsoever to increase the cost of postage stamps. It's not the result of a negotiation. It's simply subject to the Postal Act that applies in the Netherlands and sets these rules. We did increase our commercial rates because there was some leeway between the cost of stamps and the commercial rates, and we used that. The fact that we were unable to increase the cost of stamps in 2022 doesn't mean that we can't do it in 2023 or 2024. As for an electric delivery vehicle for our subcontractors, it is important to us. If you consider our environmental objectives and CO2 targets, then from 2025, we aim to make our delivery partners greener.
We do that by setting up a good market for used electrical vans, and that brings about a market for secondhand vehicles, and that gives access to electric delivery vans for other entrepreneurs in the Netherlands, not only our own delivery people, others as well. We're boosting that market. We are thinking to see how we can ensure that those electric delivery vans that remain more costly per kilometer than diesel vans, we want to make them more accessible for others in the Netherlands. It's an important point of consideration, and we would like to pursue it. Thank you very much. Oh, we see quite a few hands raised. We have other topics this afternoon too. Sir.
My name is Rijnen. I got here about 1:30 today, and there was a demonstration from the FNV Trade Union outside. It was a very civilized demonstration, but before I'd even got out of my car, the police were breaking it up. I would think that's the kind of thing we do in countries that we prefer not to trade with. Some of them are very nearby. There are a number of countries that don't observe our basic rights, and I think that the board here should send a message to the mayor to say it is not acceptable for a civilized, well-behaved demonstration to be broken up. It is not acceptable.
Okay. Eva, perhaps you can explain that this was not our call. That's correct. Because it was on the hotel's own premises, and they, the hotel people didn't want it. They were asked to move outside the gate, but they were still allowed to continue over there. Well, we can deal with the Marriott International about this because it was not our call. We did not start that. I think that's how we'll need to discuss it. Agreed. Yes, sir. We'll need to be a bit stricter, but you'll get your turn afterwards.
My name is Fekkes. Firstly, I'd like to make a comment. These slides on the screen today have got the wrong date on. Because they're all dated April 2021. The slides you showed us have got the wrong date on. I think they've got the date from last year's shareholders meeting.
It says financial year 2021.
No. The slides themselves, you can see them. I haven't got them printed out, but I saw it on the screen. It says 2021. That's just my quick comment. Now, my question. I've been a PostNL shareholder for a very long time. Ewout de Wit knows this, but just going back in through history. PostNL used to be called TNT, and then TNT was broken up. We got PostNL. TNT was a parcel delivery service. Okay. I thought, okay, we've got PostNL, they'll be delivering the post, won't they? Now, PostNL now delivers parcels. You've had really good couple of years behind us now because of COVID. That really did give us the helping hand.
Also, if we consider what the FNV trade union lady was saying, what you want to do in the future, we as shareholders want to see some yield from time to time. We don't want to keep on getting nothing. Your strategy is currently focused on postal parcels, and you're going to be investing EUR 450 million in that. Now, I can't understand this. COVID-19 is behind us now. Well, let's hope it is not gonna make a comeback. Consumers are going to go back to the shops again, aren't they? Actually going to shops. When I look at the future, what about all these parcels from China? I sent a parcel, I paid EUR 2.30, and then PostNL delivers it to my letterbox.
If I look at the statistics, say, in the Netherlands, for postal parcels, there's a lot more money. My question to the both boards is, why all this investment in parcel delivery? Where do you think this enormous growth is going to come from? I can't see any prospect of it. If things get back to normal, well, as I said before, we've had two fat years for parcels. As a shareholder, I don't see massive growth in parcels. Perhaps you could shed some light on that. Because EUR 450 million? Okay. Yes. Look, I've got some misgivings about that. Yes, indeed. What's your views? Also supervisory board, why all this attention for investment in the strategy? I can't see it. Otherwise there's going to be lots of takeovers.
Perhaps you've already got some takeover talks already going very well. I'd just like to say, you've got these two divisions, the mail and the parcels, and they're separate. Perhaps we could divest from parcels.
I think we understand your question. Pim, Herna, who would like to answer this question? If you have a look at PostNL's strategy, we focused on growing parcels a long time ago. We started that a long time ago. The fact that there's a company where the revenue is growing and the dividend can be distributed because we made the transition from mail only to 70% e-commerce logistics, i.e. parcels. In the past two years of COVID, there has been massive growth in parcels, but even in the preceding years, the growth was substantial. Sincerely, if you're talking about the future, about PostNL parcels is should be the engine for the growth of PostNL. Now, as Pim said, it's EUR 500 million and EUR 450 million that we announced last year in July. A combined total of EUR 950 million.
Whether you spend all of that depends on the growth in the years ahead. We expect parcels to continue growing, in part because you see that the number of web shops in the Netherlands is rising and you see that the number of Dutch people purchasing online is growing as well. It's not declining. We expect that growth to continue in the years ahead, and the extent of that growth will determine how much of the investment we'll make. We need to strike that balance very carefully. We need to keep watching it so that we invest at the right time, so that when the growth materializes, we can distribute the parcel volume on the market. We don't want to overinvest. The growth engine behind PostNL in the years ahead is parcels.
Now, in your introductory words, you mentioned China. That was really a VAT issue. There's a VAT to be transferred. But what sort of impact does that have for deliveries? Because I can hear people saying, "Oh, this is all because of VAT. People order goods online and so on, and if it's more than EUR 25, then it's not profitable anymore." So I can't help worrying about this predicted growth. Consumers are going back to the shops again. In 2020 and 2021, we had this turn up in parcels. But what can you do? What takeovers do you expect to carry out?
In parcels, we don't envisage large acquisitions, so the growth won't be through acquisitions. The growth will be organic, which means that we will see that the Dutch will continue their habit of increasing online purchases. What we will see in 2022 is that we won't experience what was related to COVID, so the growth figures are lower this year than they were last year because of the non-recurring volumes. As for China and Spring volumes from Asia, Pim mentioned a bit about that in his presentation, and I'd like to explain how that will affect us as well. Or rather, Pim will explain how it will affect us. I'll say a bit more about the figures. I said that there's about 13.8% in parcels, including non-recurring COVID.
If you adjust for that section, then the growth remains above 11%, and the impact of international decrease in the second half of the year is somewhat below that level. Overlooking the international section, if you disregard the non-recurring COVID-19 section, then you've still got a growth in excess of 10% within parcels. If you look back in recent years, then you see that the share of consumer spending online is up, and that's the ongoing effect of COVID-19. More has been purchased online and will continue to be purchased online. We think that the growth is still there. Another aspect that might give you some confidence, at least I hope it will, is if we look at the return on invested equity, then we achieved a return on invested equity of 16%-17%.
We've also indicated that we will determine every investment. Whether we do that investment, we will have that depend on whether it creates value. As long as we can maintain 8%, we're creating value. Obviously, we're monitoring that carefully. For each investment, we need to achieve a return of about 8%. You also asked, and as you'll know, we discuss this at each meeting with the board and management. I think another important difference is that we have extensive analyses of the COVID effect in the past two years. This has been taken into consideration. Now, I promised that gentleman the floor.
My name is Armand Kersten from VEB Association of Shareholders. Now, there's no getting away from it. Belgium again. Now, it's been discussed a lot already. Today there's again accusations of child labor in Belgium. Now, I've got a number of questions on this issue. I think I could present them as a threesome. I'd like to start off with what I'd like to call social value. The social value fits the social value paragraph. The second thing is profit margins, and look at the profit margins achieved in Belgium and compare those with the Dutch one. Finally, what I think is the most important point of all, that is the ramifications, particularly ramifications for management. First point, social value.
In your social value paragraph, page 47, you say, "Vast majority of our delivery partners are professional and apply the same standards on social compliance as PostNL. When we detect non-compliance, this may lead, but only in a limited number of cases actually has led, to cancellation of our collaboration." Now, in the light of what we are hearing about Belgium at the moment, and of course, I'm happy to say that there's not been, no court has examined these accusations yet. But nevertheless, non-compliance from a delivery partner should not only lead to immediate termination of the relationship, but why does PostNL think that the vast majority abide by PostNL's values? Why do you think that's enough? Next, profit margins. Now, the VEB Association of Shareholders takes the view that reporting of the Belgian results, how should I put it?
has always been rather sidelined. In fact, the Belgian profit margins are much more, I mean, much more than double in the Netherlands. Now, we can talk about the details of that some other time. I don't want to do that now. It's more than amply more than double. Then, rationally speaking, you should say, ask yourself, how is that possible? Because at first glance, it seems a strikingly higher profit margin. It could perhaps sound like a leading question, I realize that. You could say, does that arise from the way in which we deal with our subcontractors? Could we imagine that there is exploitation taking place? Finally, this is an important aspect, the ramifications of all this.
Firstly, the VEB Association of Shareholders did see that from the moment these first reports emerged in Belgium, particularly at some of your staff and managers being taken into custody, that led to very extremely hot heated responses from PostNL. Extremely heated. But at the same time, we saw Mrs. Verhagen not exactly coming to the forefront of things, neither in responses or anything else. Then you can't help thinking to yourself, when something like this happens, isn't that really something for the boss to deal with? And can't you show that it is a matter for the boss if the Chair of the Board speaks on behalf of the company? Now, I realize this is a very difficult question, but I'm going to ask the question anyway. Supposing in Belgium, there are convictions in court. What consequences in the Netherlands will management draw from that?
What should the consequences be in the light of the extremely heated PostNL responses to what's happening in Belgium? Thank you.
Regarding your first question, which concerns social value. Non-compliance comes in many forms. I'm sure you understand that. This means that if non-compliance is serious, we discontinue relationships. Non-compliance, as I explained in my presentation, fewer than 0.5% of the inspections leads to the observation that an ID has gone astray. In those cases, we think that it's justified to give people the opportunity to obtain an ID so that they can continue the ID. When they can get their ID back and drive the next day. In other cases, there is a true violation that will lead to termination of relationships with delivery professionals, and there have been some terminations in the past year. You need to consider the extent and the severity of the violation concerned.
The formulation we chose was because last year there were 3 or 4 delivery professionals that were terminated. In our view, that's a correct formulation of the facts of that year, which is that we were not able to retain 100% of our delivery professionals when, in our view, some of them did not sufficiently comply with legislation and regulation. That's why we used the wording, the vast majority. As for the profit margins, I'll hand you over to Pim, and then I'll get back to about the last question. The suggestion that we earn twice as much in Belgium as in the Netherlands, that's simply not true.
If you consider the margin in parcels, the contribution from Belgium is lower than the average contribution of the parcels segment, especially if you consider the results of parcels in the Netherlands. That's an answer. We don't earn more from parcel delivery in Belgium than we do in the Netherlands. Now, as to your last question, I believe that when there's a crisis in an organization, and what happened in Belgium is indeed a crisis, then you have no choice. We are indeed trying to decide how to distribute the work and the duties to ensure that all the aspects we need to cover, for example, that we serve all stakeholders. We are trying to ensure that we do that as best we can.
In Belgium, we decided that Liesbeth Kaashoek, who's the managing director of parcels and logistics, was the spokesperson. From networks and communications, I was in the background trying to influence stakeholders to get our people released. That's what's relevant. I think you have to do what will achieve the most impact at that point. Anticipating the consequences is, in my view, speculation. What our top priority is to defend our business and our people, and we'll get back about that later on. All I can do is confirm what Pim and Herna say on behalf of the Supervisory Board. Now, you already had a turn, sir. You can ask questions at the next topic. We're going to continue with the report from the fourth, because all we're talking about so far are the events in 2021.
Remarks off mic. I'll get back to you in a moment.
Chairman, my name is Liesbeth Hanekroot. One of the early speakers was talking about slit eyes, and I would like to say I dislike that kind of expression. I imagine the board would like to agree with that.
Yes, I had some SMS messages that we also are doing that. This is not right for this meeting. I'd like to stop this trend. I'd like to move on to the next topic. Mr. Van den Bos. Well.
I think I have a right to speak as a shareholder. Firstly, the whole parcel market and the profit margins and all that stuff, what everyone is overlooking is that here in the Netherlands, we have got an open postal market in the Netherlands. The Netherlands is the only country, once again, the Netherlands is the only country which created a free postage market for parcels and mail. Sandd was part of that. The German Deutsche Post was EUR 150 million they wrote off from that because they were a partner in Sandd. That whole business with the whole parcel market, and all kinds of harsh words have been said about it. I've been a PostNL shareholder 15 or 16 years. I was there when Coster was in charge, when Mr. Bakker was in charge. Yes, it was great fun.
If I look at the whole of the market, people are unhappy with it. Then when we cast our vote, we have to bear in mind all those people who were so keen to have a deregulated postal market. What did that mean? DPD, 100% owned by the French government, is a state-owned company, and they can be as competitive with tariffs as they like. They can deliver a parcel for EUR 3 in the Netherlands and contract it out. That's what we call a deregulated postal market. Now, I'm not blaming PostNL for this, but that's all I have to say.
Thank you very much, Mr. Van den Bos. I would like to move on, and then you can speak again at the next agenda item. That's the annual report for 2021, adoption of the financial statements. That's agenda item 4. Now you can ask questions relating to the report from the board of management and the supervisory board and the financial statement. After this, we will discuss remuneration separately. Do you have any questions about agenda item 2-B? Yes. You have the floor.
Thank you very much, Chairman. My name is Stevens. Now investments. We've got EUR 80 million in computerization, EUR 450 million in parcels. We wonder how this is going to work in financial terms. Because if you order them some new item, some new device, it won't be delivered until, I don't know, halfway through next year or 2024. Just one example, there's many examples, of course. The things you need to order now and not going to get delivered till much later. We've got to look at that in terms of the EUR 180 million and EUR 450 million. How does it fit in?
Thank you, Pim. I think this question is perfect for you. Thank you, Mr. Stevens. Yes, this is quite simple. Yes. There are supply chain problems in some aspects, but if we're talking about justifying it as a capital investment, then the moment in which we start using it is when we account for it. So when we order a truck but are not driving it yet, is not yet a CapEx. But when it's delivered with the keys there and we can use it, then it becomes a CapEx. Because then we've taken the CapEx and lease obligations into account. So if it hasn't been delivered yet, it's not a CapEx, but we haven't paid for it yet either. I'm sure you understand that.
You've got to put that money in reserve.
We have a cash position on the balance sheet at the end of 2021. About EUR 850 million cash was there. I've shown that we expect to have a positive free cash flow in 2022 as well. Using that free cash flow and the cash position, we pay investments, and we also pay the cash part of the dividend to you as shareholders. We're sufficiently liquid, and we have enough leeway on the balance sheet as a consequence of our transition from recent years to be able to pay for all those investments.
I do understand that, but you're saying you had EUR 800 million in cash, but how much of that do you need for investments? I can't see that anywhere in the report. We just gotta say, "Okay, EUR 800 million cash," and then some of that will, of course, disappear for investments. That's already happened.
Well, we didn't enter those commitments yet. We have a cash position, and together we have a positive result that leads to positive free cash flow. The cash position increases even after subtracting investments. You saw those on my slide, between the result and the free cash flow. You see the CapEx line, and you also see an increased investment level from 2021 to 2022. The results of financing the company, the necessary investments in capital.
That doesn't do it on the fact that this year you're gonna have to wait to deliver the things you're already ordering. You've got to bear in mind that costs. These costs are in the pipeline.
Well, we consider them, and we account for them when we take them into use. As CapEx is, it could also be a lease obligation that we disclose separately, but we have sufficient liquidity and cash flow creating assets to make the investments that we want to make. That's the position that we got the firm into in recent years, and it was not always the case.
This EUR 800 million, then we've got to subtract a few million from it in our minds and the next year because you're gonna be spending that next year.
There's EUR 48 million in cash. We try to create a positive free cash flow in 2022, something is likely to be added rather than taken out. I think you're getting plenty of guarantees from the CFO. They're not really guarantees, but I think it was very clear that our cash position has improved considerably with respect to what it ever was during my period. Okay. Mr. Van den Bos knows about historical figures. May I assume that we've sufficiently covered this topic, then we will move on to remuneration. Thank you. Now we will discuss remuneration. First, the remuneration report, which is agenda item 3A. Since 2020, the remuneration report is presented to you each year for an advisory vote. The remuneration report for the 2021 financial year appears as chapter 15 in the report from the board for...
I'm pleased to give the floor to Ad Melkert, Chairman of the Remuneration Committee, to elaborate on the remuneration report. Ad, I hope that you're present, and I hope this works.
Yes, I'm here, and I hope the technology is working. Thank you, Jan. Well, you were told, the Remuneration Report for 2021 will be put to you for an advisory vote. Before we proceed with the vote, I'd just like to point out that both the Management Board remuneration in 2021 and also the remuneration of the Supervisory Board in 2021 is compatible with the basic line that in 2021, the shareholders' meeting agreed on the general line. Against this background, it's also worth pointing out that at a previous shareholders' meeting, you passed the Remuneration Report for 2020 with 98%+. The result of that, we talked to a number of stakeholder representatives and asked them for input regarding our Remuneration Report for 2021.
That did not lead us to make any alterations to the report. Because of the continuing pandemic, 2021 was a very unusual year, and that applies to everyone, including PostNL. Luckily, we were able to make use of experience built up in previous years, where we could look at everyone who works for and with PostNL. We could make sure their safety and health was the number one priority. At the same time, e-commerce and the transition in our Post business were continuing to change. In 2021, PostNL continued implementing its strategic objectives, including sustainability and computerization. In early 2021, the Italian operations were sold off. We set up a social plan agreed with the trade unions, and we set up a robot-based sorting office for small parcels near our main sorting office in The Hague.
Now, the remuneration report is on pages 94 to 103 of the annual report. On page 97, you can see that the total remuneration of the management board is higher than it was in 2020. This is because of three things. Firstly, an increased long-term incentive, LTI, which in 2021 was compared with the value of the 2020 LTI. That applies to both the CEO and the CFO. Secondly, because of the index linking of the fixed component at 3%. That's in line with general index linking within the company. Thirdly, particularly for the CEO, a one-off payment to the pension on the basis of agreements arising from the abolition of the pre-pension. This is a one-off payment agreed in 2006.
It was not only for the CEO, in fact, because there's about 5,100 other members of PostNL staff who met the requirements for that at that time, have also received a one-off payment into their pension scheme. That's it so far then.
Thank you, Ad. Now, we'll be pleased to answer questions that were submitted via the chat or those present. Mrs. Rietveld, please go ahead. Okay. I can-
It's just a comment. Mr. Melkert was talking about the social contract. Now, we Post delivery staff have a separate collective bargaining agreement. We haven't got a social plan. If anything happens to us, you've just gotta put up or shut up, or you just, you have to accept it or resign. We haven't got a social plan. That, well, look, that's something we've said again and again in collective bargaining. The, it is really a bare-bones agreement for the Post delivery staff, and it absolutely does not. It is not suitable for the current world. It really, we should be included with other staff in the collective agreement. That's my question to the Supervisory Board. Could you please give attention to this?
Because I do understand that you won't be speaking on anything concerning the CEO, but please exert your influence here. Please, question also to Mr. Melkert.
Well, can I commit that we'll take this on board? Is there anything you'd like to say about it now? Yeah. Yes. Thank you. Any other questions? Yes. The gentleman from the VBDO.
Yes, indeed. My name is Kersten from the VEB Association of Shareholders. Remuneration policy. There have been some alterations here, and I think we won't be going through them now. Against that background, I have an arising question. Did the PostNL Remuneration Committee say when the remuneration policy was changed? How you were negotiating with Ms. Verhagen about her severance package, because her severance package is completely different from the Dutch Corporate Governance Code. The corporate governance code says that when you have a severance payment, for example, in the circumstances of change of control, the maximum payment must be 1 times base salary. Thank you.
Well, you know the procedure, but I'll ask Ad to answer that one. This question was raised in recent years, and the answer has consistently, and should consistently, be that the supervisory board is respecting the agreements reached with the CEO in 2010 and will continue to do so. Thank you. Any other questions? Yes. I didn't hear what you said.
Oh,
No, I respect my elders. Now then. This whole of the remuneration policy, this 3% question. We asked the banks this earlier as well. Now, if you look at top-down, you can see the 3%, and things are diverging further and further. I'd be much happier if we said, "Well, take the average of the whole salary, of the whole sum and take 3% of that, or we take 2% or perhaps 2% at the top and 4% at the bottom." The second point, in order to keep overheads limited, you should have a pro tem rule, and I would be very much in favor of that myself. You say, when things are going well, it should go well for the staff as well.
You could say you could do what the ING Bank does. You could say everyone gets a certain number of euros. In ABN AMRO, for example, it was totally different. At least it was when I was working there anyway. You had four-month pay when things are going well. ING says either/or, everyone gets the same share, whether it's someone from the board or post delivery staff. I'm very much in favor of that. Then Ms. Verhagen's, the buyout. Well, what I remember from the past is that it's a maximum of half a year.
This is not really a question. This is more of an observation. Thank you. Are there any other questions? No. I note that this agenda item has been properly covered, and we're going to move on to the advisory vote concerning the Remuneration Report. We are asking you to vote in favor of the Remuneration Report to approve it. Before we proceed with the vote, I can tell you that the short list of attendance reveals that we have 1,128 shareholders present or represented at the meeting, which can cast a total of 254,767,087 votes. 49.97% of the total share capital is represented.
The powers of attorney granted to our civil law notary accounted to about 92.97% of the represented capital. Before I ask you to vote, Ewout, the floor is yours. Please explain how the voting system works.
Yes, I do this every year. Well, it's a bit different, in fact, this year because it's a hybrid meeting. For people in the room, you can use the app on your smartphone or tablet or using the voting handset you received when you entered the room. You got a code when you came into the meeting, and when you log in using that code, you'll be using the app to cast your vote. You can vote for or against or abstain. People online, you logged on using the ABN AMRO system, and you can vote. You cast your vote on any agenda item at any time. All of you in the room or online can change your vote until voting is closed at the end of the meeting. Of course, it's your last vote which counts.
As the chairman said earlier, we won't know the voting results on all the agenda items. It's all at once at the end of the meeting. When voting is closed at the end of the meeting, we will then display the voting results, agenda item by agenda item on the screens, and these will be the results of the votes cast by you during the meeting and also the proxy votes. Now I give the floor back to the chairman.
Thank you, Ewout. I assume I can continue with the meeting. You may now cast your vote regarding the remuneration report for 2021. "I was afraid of that," explains the chairman, Jan Nooitgedagt.
Could anybody from the technology, from technical support, please step in? Yes, perhaps just for sake of completeness, voting on all agenda items is open now. If you wish, you can already vote on the last agenda item. You don't have to. You can wait until each agenda item is discussed, if you prefer. I'm just looking around. Have we ironed the problem out? Yes. You can now cast your votes on all agenda items. Is anyone still having difficulties voting? I shouldn't have asked, should I? There are some hostesses in the room who are helping people out. That was the remuneration report. If I may, I'd like to move on to the remuneration policy for the management board. This is agenda item 3B. The current management board remuneration policy was agreed in 2020.
Now a new remuneration policy is being put forward, drafted in line with the legal requirements after the Shareholder Rights Directive was transposed into Dutch law. The Central Works Council was invited to speak on this if it wished, and they voted in favor of it. The proposed new policy, together with the advice from the Central Works Council and the decision by the company, is annexed to the agenda. For an introduction to the new management board remuneration policy, I'll give the floor once again to Ad, who is Chair of the Remuneration Committee. Thank you very much. Well, now then we're going to be talking about the proposed remuneration policy for the management board that will apply from 2022 onwards. The current policy was approved by you in 2020.
Now, one of the tasks of the supervisory board every four years is to examine the management board remuneration policy and put it before the shareholders meeting. Here we are, two years later, we are now proposing a new policy with a slight amendment, which we'd like to outline to you. The only amendment here is to the long-term LTI performance measures, the variable income, in other words. No other changes are being made to the remuneration policy. The evaluation of the entire remuneration policy will be dealt with at another point. On the slide on the screen, you can see once again the parts of the remuneration policy which will not be amended. Now, in the procedure we went through to come up with a new remuneration policy, we approached shareholders and other stakeholders to discuss our proposals.
This did not lead us to make any amendments to our proposal. The Central Works Council has rendered a positive advice on the proposed new policy. Two amendments to the existing board of management remuneration policy are being proposed. You can see here they deal with the long-term incentive component. Firstly, the adaptation of two free cash flow performance measures. We would have one free cash flow for the whole of PostNL rather than one for mail in the Netherlands and one for parcels. The second is the impact of the three other long-term incentive measures to be changed to 33.33%. Those are the only amendments being put before you.
Now, by way of background to this, in the last two years, it's been clear that cash flow performance measures at segment level, that is to say one for Mail Netherlands and one for packages, can lead to undesired results. For that reason, the Supervisory Board is now putting this new remuneration policy forward, which will have one single PostNL cash flow performance measure at PostNL level. The LTI of PostNL hasn't got what we call a stretch opportunity. That means that the LTI can go higher than the target level when performance is very good. This means that high performance of one target can't be used to offset underperformance on another. Although in fact, of course, the Management Board is responsible for the performance of PostNL as a whole.
Performance levels at segment level also make it harder at the beginning of a performance period to set realistic targets. The Supervisory Board therefore takes the view that performance measures at segment level are inadvisable in the future. The adapted remuneration policy means that rather than having 4 LTI performance measures, we will have only 3 from 2022. Which means that the weighting for each performance measure will go up from 25% to 33 and a third percent each. This is in line with the principles of simplicity and transparency, which you'll find in the remuneration policy. Furthermore, having equal weighting for each LTI shows that each LTI performance measure is equally important in strategic terms. Thank you very much.
Thank you, Ad. We will take questions now. Are there questions about this presentation? Yes, Mr. Kersten.
Yes. My name is Kersten, not Kerstens. No S at the end. From the VBDO. Thank you. Very quick question. One of the performance measures is climate impact. As we see this, it's that CO2 efficiency of operations is the definition. Now, we don't fully understand what that means. There's no disclosure. We'd like to know why. We would be very pleased to hear if it's looked at and assessed after the event. Is it also externally audited? Thank you.
I think this would be a good question for Pim to answer. The objective is the same as when we showed the improvement per kilometer of emission, and the objective is certainly to show how this was realized. Mrs. van Overbeek explained the assurance concerning non-financial targets, and that's included there. Yes? Thank you. Any other questions? No? Yes. I keep missing you.
I've got a question for Mr. Melkert. Very simple question. West Frisian question. What is the difference? What is the difference between the current remuneration system and the future one? I'll put my question very simply. Simply, that is my question.
That's why we've brought about performance measures.
Mr. Melkert, it's a very simple question. The question is, what is the difference in cash terms? What is the difference in euros between the current remuneration policy and the proposed future remuneration policy? How shall I put it? You explained it to us using all kinds of English buzzwords, but that's my very straightforward question. Let's keep things simple. Now, you're dealing with someone from West Friesland and someone like you. We like to keep things simple. Simple question. Could I have a simple answer?
I'm from a simple village in South Holland, and we like to understand things there too. What matters here is the performance. What is ultimately realized, and that's carried over to a variable remuneration of which the principles have been adopted in the remuneration policy, subject to approval from the general meeting of shareholders. I can explain them in North Holland style as a Brabant person. There is no difference in actual remuneration. The long-term incentive had been 37.5% of our base salary, and in the future it will also be 37.5%. No difference in cash. The foundation for achieving it, that's the change, and that's what we're talking about here. There's no difference in the amount that you can make.
Can I say in theoretical terms it's 300,000 at the moment, and if in the future, with the proposed new system, how much would it be, Mr. Melkert?
If there are no more questions, then I would like to open the vote. It's important to pay attention because according to the legal requirements, a 75% majority is required for these types of resolutions. Eva, can we open the vote on this? Yes. Okay, I hope this worked. No, not yet. Are we ready? That takes us to adopting the financial statements for the 2021 financial year. You will see that in the report from the board from page 123. As stated, the financial statements have been audited by Ernst & Young Accountants LLP. You'll find the qualified auditor's opinion from page 228 of the annual report. Are there any questions about the financial statements for 2021? No. Not in the chat either. Okay. I would like to open the vote. Please cast your vote.
I ascertain that the annual report and the financial statements have been sufficiently covered. Is everything working? Is the system working? That takes us to item five, dividend. Five A, dividend policy. The PostNL dividend policy, in keeping with the Dutch Corporate Governance Code, should be addressed as a separate item and accounted for at the shareholders' meeting. The dividend policy did not change in comparison to the dividend policy explained during the annual general meeting of shareholders last year. The highlights of the dividend are that dividend is distributed, provided that PostNL is financed within the correct financial framework. The objective is to distribute dividends that develop substantially in line with operational performance, a payout ratio of around 70%-90% of normalized comprehensive income.
Shareholders are offered a choice to opt for cash or shares and the interim dividend set at one-third of dividend over prior year. Now, I'll do that all at once, and then we can continue, and that takes us to agenda item five B, the profit appropriation. Assuming that you've adopted the financial statements for 2021, we propose a dividend debited from the profit for the year 2021 of EUR 0.42 per ordinary share in cash or shares at the option of the shareholders, which corresponds to a payout ratio of 25%-75% of the normalized comprehensive income of EUR 285 million. EUR 0.10 was distributed per share as interim dividend in August 2021, resulting in final dividend of EUR 0.32 per share. The shareholders have the option of taking a dividend in cash or in shares.
This proposal also includes the proposal to designate the board of management as the authorized body with the approval of the supervisory board to issue a number of ordinary shares to the extent necessary to pay out the share dividend and to exclude the preemption rights in relation to this issue. The exact number of shares will depend on the choice of shareholders between a distribution in shares or cash. You'll have read the explanatory notes to the agenda to this meeting, reflecting the technical details and in the press releases published on March 8, of this year. Next, are there any questions from the people in this room or via the chat? Are there any questions about this agenda item?
Yes. Well, I've got a question to all the shareholders here present and also people attending online. Please vote against. Now, of course, this may be depriving yourselves of income, but as I see it, we're now 55 days into a war where there's a very different kind of democracy going on, something that we do not want to copy what's happening in Ukraine. We give them our fullest support. They are struggling. They are fighting autocracy. If you look at how we should put the flesh on the bones of democracy, perhaps there's too much attention to bankers democracy. Bankers democracy, please vote against. Now, there's plenty of arguments, of course, on this question, of course. You could spend it on our wages, for example. We're on the national minimum wage when working for this company.
You could show the social facet of the company, you, as shareholders. This, therefore, is my request. Thank you.
Thank you very much. I certainly understand what you're appealing for. I'm not sure whether any shareholders would like to respond, but I'm not sure this is the best forum for discussion. I would like to continue and put this proposal to the vote unless there are any other questions or comments.
I've just been looking at the share yield on my shares, and that's -83%. Whereas other places I can get 3,000%. Of course, you've always got to bear in mind that you're spreading your risk. IMF has said that in the light of the current circumstances, this could carry on as it is for a long time, and this would mean there's going to be higher inflation in the pipeline. The problem is particularly to be found in the energy field. If you look at rapid profit, it can be done. You could have a few 1000 members of staff. If you buy collectively, Mr. Nooitgedagt is very experienced in making a good job of this.
You buy a power wall, a Tesla battery, solar panels, circular showers and so on, where you save lots of energy, and that can all be sold out for EUR 10,000 . You can give a loan to your staff. They pay back their interest on it. It's much cheaper for them than all the other ways in which you could achieve this. In addition to this, the money goes back to the shareholders, and we might have to wait a little bit longer, but we've already been waiting a long time, haven't we? It's not very expensive, but your staff don't earn enough in order to fork out EUR 1000s each for their solar panels, et cetera, et cetera. So Mr.
Jan Nooitgedagt has a banking background, and he used to be chairman of the bank, and Ms. Herna Verhagen, who works at ING Bank. I know that you are both creative in these matters. You can take action here. If you use less energy, it's also very good in dealing with Mr. Putin because you don't need so much gas. I'd like to invite you to look together to see how your lower-earning staff can have their lives made more sustainable in this way.
Thank you. We'll take that on board. I just don't know exactly how.
Yes, I have a request. Yes, I dare say you're shareholders of lots of other companies. Please have a look. Have a look to see what you are earning and how, and support the lower part of society in a creative way. It might be taking money out of your own wallet, but we're already doing that, aren't we, by supporting Ukraine? The Prime Minister thinks so, too. The Prime Minister, Mark Rutte, last week also called upon us all and said, "What are you doing? What are you doing in response to what the prime minister said at his party?
I think that holds true for each individual. It shouldn't stop us from doing things. Nonetheless, I would like to put this proposal to the vote. I'd like to open the vote. What would you like to add, Mr. Van den Bos?
I think we're getting a bit political here. I would be much happier to see the dividend being rather than the dividend being paid. I would like to see you buying back more shares. That would be a way of strengthening the company rather than getting up to all kinds of shenanigans. One thing I would like to draw your attention to was something Mr. Fraker was saying. There's a conflict of interest for Ms. Verhagen. I think the family member is on a bank board. I don't want to go any much further than that, but I just wanted to point that out. I hope that it will go in the minutes.
I would like to move on.
I'd just like to respond. No, I'm talking about sustainable financial ways in which you can roll out sustainability rapidly, particularly to the lower earners in society, because EUR 15 an hour, it really doesn't give you any chance to do anything in this country.
Thank you. Now, if you've all cast your vote, we will move on to the next topic. Item six is discharge. Granting discharge. Release from liability. The General Meeting of Shareholders is requested to release the members of the Board of Management. Well, you can keep voting. I'd still like to move on to item six, which is the release from liability. The General Meeting of Shareholders is requested to release the members of the Board of Management and the Supervisory Board of PostNL from liability for their management of the company in the financial year 2021. Also the members of the Supervisory Board. Before addressing the individual agenda items, I'd like to emphasize that the Board of Management is once again deeply impressed with the performance of...
Excuse me, the Supervisory Board is deeply impressed with the performance of the Board of Management. PostNL ran at full capacity and delivered post and parcels while considering the health and safety of staff as its top priority. As the Supervisory Board, we believe that this is an unprecedented achievement and are proud of it. As the Supervisory Board, we believe that focusing is important in realizing the strategy and creating long-term value. In the process, we address the risks and opportunities with respect to PostNL's strategy. In implementing our duties as the Supervisory Board, several topics were discussed with the Board of Management, including coping with the challenges relating to COVID-19.
As one of the largest employers in the Netherlands, extensive consideration is also given to the people who work for and at PostNL, as well as the results of parcels, mail in the Netherlands, and e-commerce, and creating value for our shareholders. Other topics very important for PostNL that we address regularly include sustainability and digitization, and we support the Board of Management, supervise and advise as needed there. As stated, 2021 was once again a challenging year. Under the aegis of the Board of Management and the supervision of the Supervisory Board, PostNL achieved very good results there. Now, on to the individual agenda items. 6A concerns the release from liability of the members of the Board of Management.
The general meeting is requested to release the members of the board of management from liability for their management of the company in the financial year 2021, insofar as such management is apparent from the annual report and the financial statements or from information provided to the general meeting otherwise. We will now answer any questions there may be about this release from liability. Are there any questions? If not, may I remind you to cast your vote on the proposal to release the members of the board of management at PostNL from liability. Now on to six B, which is granting release from liability to the members of the supervisory board.
The general meeting is requested to release the members of the Supervisory Board from liability for their supervision of the company in the financial year 2021, insofar as such supervision is apparent from the 2021 annual report and financial statements or from information provided to the general meeting otherwise. Are there any questions about this item? If not, once again, I'd like to remind you to cast your vote regarding the proposal to release the members of the Supervisory Board at PostNL from liability. Next, 7, the composition of the Supervisory Board. In keeping with 23.1 of the Articles of Association, Supervisory Board consists of at least three members. The Supervisory Board determines the actual number of members, which has currently been set at seven members.
In keeping with the scheduled rotation adopted by the board, I will step down at the end of this annual meeting of shareholders. As stated previously, I am pleased to be available for reappointment for a four-year term. There is also a vacancy as a consequence of Agnes Jongerius stepping down at the end of the general meeting of shareholders in 2021. As a supervisory board, we are delighted to nominate Hannie Vlug as a member of the supervisory board, and the Central Works Council has an enhanced right of nomination here. Now, 7B, opportunity for the general meeting to make recommendations for appointment to the supervisory board. The general meeting may recommend individuals for to the supervisory board, in keeping with the profile which appears on the PostNL website.
We are not aware that the general meeting of shareholders wishes to exercise this authority to make a recommendation and are now assuming that the general meeting is waiving the right to make a recommendation. I will move on to the next agenda item, which is 7C. Announcement by the Supervisory Board of the persons nominated for appointment and reappointment. Since the general meeting has not recommended anybody for the supervisory board, the Supervisory Board wishes to nominate Hannie Vlug for a four-year term and to reappoint me also for a four-year term. Regarding this last item, I will hand over to Marieke van Lier Lels as Deputy Chair of the Supervisory Board. Both appointments are in keeping with the Corporate Governance Code.
Now on to the next agenda item, and I'll give the floor to Marike, and I hope that all this works. Yes, Marike.
Thank you very much, Jan. Well, the Supervisory Board. The interpreter can barely hear what's being said. The interpreter will do his best. The Supervisory Board proposes to reappoint Jan Nooitgedagt as member of the Supervisory Board for a second term being a period of four years. His work at PostNL in the past has been very, very useful. He has made use of his expertise and knowledge, and we wish to keep him on board. We are therefore delighted that Jan is willing to make himself available. His CV and the reasons for proposing him are submitted with the annotated agenda. We'll now move on to reply to questions from the room and the chat. Are there any questions? I can't actually see you, so it's rather difficult to work out the practicalities. Yes.
I see two hands raised.
Huh?
Please go ahead. Thank you, Mr. Chairman. I'm Mr. Stevens from the SRB. We would like you to tell us why you are so fascinated with PostNL that you would like to be reappointed.
Your question is to me. Well, why do I like it here so much? Well, I must say, of course, I have a financial background, but every time I'm at PostNL, we find exciting to see what's happening, all the logistics and how complex the world of mail and parcels is. It really excites me. Over the past four years, I've been enjoying working here very much with an excellent team, the Management Board and the Executive Committee, working together with a lot of people who I find very stimulating to be with. Yes, I'd be delighted if you want to appoint me for a further four years. Mr. Van den Bos has his hand up.
Yes. I am Mr. Van den Bos. I am voting against this appointment. I have reasons for this. This is the third time in the 16 years that I hold PostNL shares that I am voting against an item. Once Agnes Jongerius was approved by 5%. The next time was the exorbitant salary increase by Peter Bakker a long time ago. Why do I object to this one? One of the main reasons, as you just saw, is that I waved my hand a few times and mentioned only Jan a few times. I think that this is long enough for a Supervisory Board member, and Mr. Nooitgedagt is familiar with the other reasons. I'll leave it at that.
Guys, I know that you didn't want to ask a question. You wanted to make a comment. Thank you very much. Are there any further questions?
I believe that Mr. Nooitgedagt has an excellent curriculum vitae and has done many fine things, so I'm delighted that you would like to continue here. I'm not sure what you think, but I believe that somebody who serves on the Supervisory Board is not somebody I would call Uncle Jan, as Mr. Van den Bos did. Maybe this is politically incorrect, but I don't think it's nice to call Mr. Nooitgedagt Uncle Jan.
Thank you very much. I can't see anyone else asking for the floor. It's always very difficult looking around. I know that we're very much in the public eye. You can see better than we can because we're floodlit. Okay. If there are no further questions, I would invite you to cast your vote on the proposal to reappoint Jan Nooitgedagt as member of the Supervisory Board. I return the floor to him.
Thank you very much, Marike. Now nominating Hannie. The Supervisory Board proposes to appoint Hannie Vlug as a member of the Supervisory Board for a term of four years. Hannie's background is management in the public and private sector, and she has strong comp skills and experience in management and supervisory roles. Her expertise and background are a very useful addition to the Supervisory Board.
We are therefore delighted that she is available for us. Her CV and the reasons for her proposal were sent to you along with the annotated agenda. The proposal for appointment is subject to the enhanced recommendation right of the Central Works Council. Hannie, may I ask you to tell us quickly something about yourself?
I'll be happy to. Thank you very much, Mr. Chairman. I hope everybody can hear me. Good afternoon, ladies and gentlemen. I'm Hannie Vlug.
I'll be happy to tell you more about myself. I presently work as Executive Chair at SBB, which is an excellent organization for occupational education in private industry. The aim is to ensure that we have enough professionals in the trade in the Netherlands and with knowledge and experience relevant to logistics, including at PostNL, to make sure that there are enough people to do the work. Before that, I worked for 25 years as a civil servant for the Dutch government, in part as the Director of Working Relations, and that's my main connection to PostNL. As Director of Working Relations, I was in charge of everything relating to social relations, pension policy, labor migration, all excellent topics.
Another issue at the time was the liberalization of the postal market to ensure that many of the delivery service workers received employment contracts as well. All these topics remain very current at this time. In addition, I was the Director of Sustainability for a few years. That's another important topic and highly relevant for PostNL, given what I just learned from Herna about all the distance we would like to achieve and all the improvement we would like to achieve to make sure that we print less and do good things at PostNL. I've also been a regulator. My longest position was a supervisory board member at a health insurance company in this region where I live. I live in Voorschoten with my husband and two children.
I'm looking forward to serving as supervisory board member and I see it as a privilege, especially as the supervisory board member nominated by the Central Works Council. I think this is an excellent challenge because much is going on and happening in PostNL, but it's above all an excellent organization. I see it as my main task to ensure that all the important values and input, such as shareholders' value, as well as customers and sustainability and good social relations are streamlined and maintained in a fine balance within the organization. I would certainly like to consider the interests of employees. I'm looking forward to doing this, and I would also like to work together with all parties within PostNL.
Thank you very much, Hannie. Looking to see whether there are any questions in the room. Yes, go ahead, please.
Thank you very much, Mr. Chairman. I'm Mr. Stevens from the SRB. We're curious how you selected Mrs. Vlug. It says that you conducted a search and looked at backgrounds and different aspects at PostNL. How were the conversations? How did the interviews proceed? Did you conduct the search yourself, or did you commission a headhunter or some other agency? Did you have a shortlist that you discussed with a select group? Who was part of this group, and did that lead to a limited number of candidates being selected? How were the interviews?
Well, that was quite a list, wasn't it? I assure you that we left no stone unturned. We worked together with a specialist company, and of course, the Works Council was very much involved in this. I don't know whether Hannie knows how many candidates we had, but we had an awful lot of them. We selected her because of her skills. You can see it on our website. We've got a matrix of requirements, and we held Hannie up to scrutiny under that matrix. We are delighted to have her on board. We investigated thoroughly.
I have some questions for Mrs. Vlug, too. I'd like to hear what she thought of the procedure and what she felt, how she felt about the interviews and whether she considered the future prospects and strategy. In how much detail were these discussed? What do you hope to add to value creation at PostNL? Did you speak with the auditor? We just heard your motives.
Good questions. Hannie, could you hear the questions? Not very well, no. But I think the first question was how I myself found the selection proceedings and how it went. Well, we had a great deal of discussion, as the chairman said, particularly under the chairman's leadership. I found those interviews very useful and productive. Ad Melkert was involved, of course, from the supervisory board. That's one question I had. The second question. Could you please repeat the question? Could you please run through your second question again? Sam. I'm not sure I heard you. Of course, the aspect.
The future prospect and strategy and the expectations of both boards of you.
Well, I think the most important thing, first and foremost, is to get a really clear view of how the company all hangs together. In formal terms, I won't be starting until after today. If the vote goes ahead, that's when I'll start being a Supervisory Board member. In recent months, I've had the privilege of accompanying the Supervisory Board, as it said. I was there as an observer on the Supervisory Board. I've been able to talk to a lot of people. I've talked to the Supervisory Board members and the Management Board and the Executive Committee. Above all, I've been finding out about what is going on. Particularly look at all the various values which are important.
Once, Pim said to me, "It's a good idea to look at this wonderful company through several different pairs of glasses." I think I'd done that to see what's happening in financial terms, what's happening in sustainability terms, what's happening in terms of social relations and so on. That last point, particularly, I think is where I have been able to build up satisfactory knowledge of this regarding our labor relations from my past. I'm very happy to bring that knowledge on board with me to PostNL.
Now, finally, did you also have a chat with the auditor?
With the new auditor? Yes. I haven't yet spoken to Hanneke Overbeek, but I have spoken to the new auditor. Yes, we had very, very productive talks. That's a good question. Yes, Mr. Van den Bos.
Mrs. Vlug, you have surprised me. You made an excellent impression on me. At first, I was very skeptical, but with your zeal and enthusiasm, you have surprised me very nicely. I have one question concerning the privatization of TPG Post, as it was called back then. Were you already the executive chair of working conditions? I explicitly mean opening up the postal market, which is an obstacle on the parcels market. Were you tasked with that at the time?
I started on the January 1, 2009. That was the dealing with labor relations. That's indeed when the deregulation of the postal market was going through. Then the Minister of Economic Affairs and Climate, as it's now called, was responsible for the actual legislation. Where I was involved was looking more at the labor, at the terms and conditions side of things. You had to have a general management tool. Had to be established in order to make sure that PostNL delivery workers would have a proper work contract rather than any kind of short-term thing. It would have to be for at least 80% minimum, 80% of the PostNL delivery staff. I'm pretty sure that is very much what's been happening lately.
Well, we're seeing this throughout the parcel market. It's a highly competitive market, and it's also an open market. If you have a state-owned company such as DPD, there's no leeway. Ultimately, I have to agree, those wages are very low. A company such as PostNL cannot pay more than what the income allows. It's very, very sad. Thank you. I'd like to say something else in response to Mr. Fekkes' comment about my calling Jan Nooitgedagt Uncle Jan. I think that Jan Nooitgedagt is ruder, and associating me with the PVV party is disproportionate.
Thank you very much, Mr. Van den Bos. Thank you. Thank you, Hannie. I'd now like to proceed to the vote, Mr. Van den Bos. I hope it's all working. All right. Agenda item 7-F. Announcement of vacancies in the Supervisory Board as per the close of the Annual General Meeting of Shareholders in 2023. According to the rotation period, Marike van Lier Lels will stand down at the end of the Annual General Meeting of Shareholders in 2023. She has indicated that she is available for reappointment, and the Supervisory Board is delighted with that fact. We'll now move on to answer any questions from the room. Regarding this announcement.
No? None. Thank you very much. Now, agenda item 8, intended reappointment of Pim Berendsen as member of the Board of Management.
As announced on the August 9, 2021, the supervisory board intends reappointing Pim Berendsen as CFO and a member of the Board of Management as per April 19, 2022, for a period of 4 years. His CV and the key elements of his remuneration package, which will not be changed as a result of his re-nomination, have been made available to you. The supervisory board is delighted to find Pim available for reappointment in this very important stage. PostNL is being transformed into the number one postal and e-commerce logistics supplier all through the Benelux. Pim's leadership has enabled us to structurally and long-term strengthen PostNL's balance sheet in order to achieve results which make it possible for us to achieve this transformation. His skill, knowledge, and drive make him the ideal person to take a leadership role in these and other trends.
Are there any questions on this? You don't need to vote on this item. What do we got with the
I'm Stevens from the SRB. We would nonetheless like to know why Mr. Berendsen is available for an additional term. We're always a bit curious how people are with respect to the market, so we'd like to know whether you were approached by some agency or headhunter in the past four years.
Like, Pim. Well, yes. Why do I like it so much? First question or second question? Well, the last four years. Well, I really like working for PostNL with Herna day in, day out, day and night. It's a wonderful company. Together with all the teams, we are well on the way to transformation, to being the number one e-commerce and logistics company. There's a lot of work still ahead of us, and I really want to do my bit. To
You were not approached in the past year?
Michael, you'll go. Yes. Yes, indeed, but I want to stay with personnel. Now, thank you, well, Pim. In any event. Well, thank you very much, Pim. I'm speaking in the name of the Supervisory Board. I say there's no point applauding because he's behind the screens. There you go. Very good. Excellent. Now, item 9, designation of the Board of Management. 9A, designation of the Board of Management. The Supervisory Board to issue ordinary shares. This year, once again, we propose the designation of the Board of Management as authorized body to issue ordinary shares and grant rights to subscribe to ordinary shares as referred to in Article 9 for a period of 18 months from the April 20, 2021. That is to say, until the October 19, 2023.
You know, the previous designation, which runs until the October 20 this year, will expire. This is an annual designation, so it'll lapse per the previous year. The authorization to the Management Board will be a maximum of 10% of shares at issue at the moment of issue. Now, this is a standard point. Are there any questions? No? Okay. I then ask you please to cast your vote, and I will move on to agenda item 9 B, designation of the Board of Management as authorized body to limit or exclude the preemptive right upon the issue of ordinary shares. The proposal is to designate the Board of Management as authorized body to limit or exclude the preemptive right upon the issue of ordinary shares.
This would be for an 18-month period going from today, that is to say, until the October 19, 2022. The current authorization, which runs until the October 20, 2022, will then become null and void. This, again, is an annual designation we ask for, and again, it will be a maximum of 10% of issued capital at the moment of issue. Now, we can proceed to any questions there may be. None. Thank you. In that case, I would ask you once again to cast your vote on this proposal. Now, fewer than 50% of shares are represented for this voting item. But a two-thirds vote is required. We'll move on to agenda item 9 C, authorization of the board of management to have the company acquire its own shares.
The authorization shall be applied for a maximum of 18 months from today's date. The proposal is to authorize the management board to acquire its own ordinary shares or depository receipts for shares on the stock exchange or elsewhere for an 18-month period from today's date. That is therefore until the October 20, 2023. The early authorization, which runs until the October 20, 2022, becomes null and void. The authorization concerns 10% of the shares, and the ownership has never been more than 10% of the current share issue. The purchase can take place at a share price of at least EUR 0.01, at a maximum a share price equal to the quoted ordinary share price plus 10%.
These stock exchange prices should be the closing price of a PostNL share, as set out in the official price journal of the Euronext Amsterdam N.V., publication in the five days preceding the purchase. Any questions from the room? Yes.
I would prefer that percentage of 10% to be increased to 15 or perhaps even 20%. It's ridiculous that with this EUR 3.40 share price, with a dividend of EUR 0.42, which is at around 11% or 12%. When you borrow money from the bank, you pay 2%. I'd rather see the percentage listed here higher, but I won't vote against it.
It was a higher amount in the past, I think. We will take your comment on board. Would you please now proceed to vote? Now agenda item 10, proposal to reduce the issued share capital by cancellation of ordinary shares held by PostNL. It is a proposal for any shares which belong to PostNL or acquired by PostNL, subject to the authorization of the annual general meeting of shareholders on the April 20, 2021, and the authorization as named under agenda item 9C should be withdrawn. In as much as these shares are not used to meet the obligations resulting from the share-based remuneration measures or the payment of shares or payment of the dividends in shares. The number of shares to be withdrawn, or the steps, will be determined by the management board.
Their cancellation may take place in one or more tranches, always bearing in mind the legal requirement that such a thing must not happen in before two months after the decision has been made by the management board. Are there any questions? No. The vote is open. This brings us to the end of today's meeting. Can I now close voting, Ewout? Yes. Okay, Ewout says I can. Voting is now closed. Now, we'll see the voting results in a moment. First, I'd just like to say a few words of thanks to our supervisory auditor, Ms. Hanneke Overbeek, and also Jan Nieuwold, who's been working with her. Thank you for all you've done in the past years as auditor for PostNL. We greatly appreciate what you've done.
The Supervisory Board and the Management Board would like to thank you for your work. Thank you for all your input today. Again, Hanneke helping to the very last moment. Thank you very much. As of this year, 2022, KPMG is PostNL's official auditor. It's Mr. Smeets who will be supervising auditor. Of course, we wish him every success. Well, now the time has come. Ewout, we're looking at the results of the various votes. Yes. We're just going to have to wait a moment while we wait for the technology to get. Did I hear anyone say any other business? Yes. Yes, as far as I'm concerned, we haven't actually got any points to do with any other business.
Uh-
Okay, here's the results. I'll read it out. Agenda item 3A. You can see it on the screen, yes? Good. Remuneration report, advisory vote 99.54% in favor. Agenda item 3B, adoption of the remuneration policy, 98.21% in favor. Agenda item 4, adoption of the 2021 financial statements, 99.99% of votes in favor. Adoption of item 5B, adoption of the appropriation of profit, once again, 99.99%. Now, the next slide. Can we move on to the next slide, please?
Yeah.
Yes, there it is. Agenda item six A, release from liability of the members of the Board of Management, 99.99% of votes in favor. The same applies to agenda item six B, release from liability of the Supervisory Board. Agenda item seven D, proposal to appoint Jan Nooitgedagt as member of the Supervisory Board. Votes in favor, 99.53%. Jan is duly reappointed. Agenda item 7E, proposal to appoint Hannie Vlug, 99.99% of votes in favor. That is also approved. Now the last screen. Agenda item nine A, designation of the Board of Management as authorized body to issue ordinary shares, 99.6%. Designation of the Board of Management as authorized body to limit or exclude the preemptive right upon the issue of ordinary shares, 99.46% of votes in favor.
Agenda item 9C, authorization of the board of management to have the company acquire its own shares, 99.79%. Finally, proposal to reduce the issued share capital by cancellation of ordinary shares held by PostNL, 99.99%. Those were the vote results. Excellent. Any other business? Okay.
Last year, I was at the KPN shareholders meeting, and they offered a lunch and as well as drinks afterwards. I don't understand why that wasn't available here. I spoke with people who came from the north of the country, were driving over here for three hours, and their stomachs are rumbling. Next year, if it's corona, you can give us a lunch bag. We had that at Shell as well, and no lunch was provided. This method now is not to be repeated.
Thank you very much. Any further comments? Yes.
I'd like to follow up on that. I googled the messages, and I checked the PostNL website, and I saw that we were not expected to arrive here before 1:30 P.M. Well, I registered with the bank, and ordinarily, I receive a message about how to get there, so directions, and I made it here through Google Maps. I think that if you don't want to welcome us earlier, then you should let us know. This was very surprising to us. We're used to what you used to do for us prior to the shareholders meeting. I hear this gentleman saying that when you used to treat us differently when you had made losses. Now you've earned such profits, but I don't think that you're chairing the meeting well either. That's my second point.
I see people attacking each other here. I see them calling you Uncle Jan. I see people saying that they don't like that. I wish they would treat you with more respect, but I would also like you to be briefer in the meeting. I don't want one person to be in charge of what's said here at this meeting. Thank you. Mr. Chairman, I'm Mr. Swinkels. I have a small question about the share price at present and about the ratio of share owning within PostNL. Perhaps I'm mistaken, but apparently somebody from abroad was able to purchase a great deal of shares in PostNL and has a major interest. I'm not sure what the percentage is. I don't know whether you have this data.
You said a few times that you can take this decision at 25% share ownership. I think that this person from abroad holds more than 25%. If I'm mistaken, please let me know. My question is whether you're in touch with this investor from abroad in PostNL. Perhaps you could say a bit more about this because it's extraordinary for a foreign operator or investor to accumulate an immense interest in PostNL at a declining share price that keeps declining. It's incomprehensible to me because what happened with COVID in 2020, all the analysts were extremely favorable about PostNL, and they were filled with praise. Now the share price that I just heard from Mr. Van den Bos, EUR 3.40.
To me, it's impossible to understand how a foreign operator can accumulate such a huge interest in PostNL. What about our Dutch investors? Okay. I prefer that the meeting be chaired in Dutch, and I would prefer that the slides that you present also be in Dutch. Why do you include so much English? How much is controlled by foreign shareholders? I'd like to hear your answer to that.
Well, yes. Mr. Křetínský's holding is set out in the AFM. He said 25.02%, just speaking from memory. It's not in the annual report, but you can see it on the AFM website. The questions in English, well, the documentation is in English because of all our foreign investors who are looking from outside the Netherlands, so that they can read the documents. The advantage of your being here in the meeting is that the actual meeting takes place in Dutch. That's an advantage for you, isn't it?
An interest of 25%, and the chairman says three times in the meeting that to approve the proposals, we have to have 75% or more of the vote in favor. You must have been in touch with this major shareholder because you're making proposals, and you're saying it's viable about the 25%, or you're going to approach the major shareholder with that proposal. What's happening with the communication? What about the investor relations? Are you in touch with that major investor? What's odd to me is that he's able to accumulate an interest at a sliding share price and holds over 25%. It's incomprehensible for me. Mr. Van den Bos said the dividend is also ridiculous, that it's 12% of the share price. It's a loose cannon.
Yeah, the shareholder, the shares are held by Vesa, one of the Křetínský's businesses, and that's important. It's the company that owns the shares. A hundred percent of PostNL shares are freely available on the stock exchange. That is to say that anyone can buy those shares irrespective of where they're based once the offer is made. That's what they did. The talks we had with Vesa are the normal talks that we have with all shareholders, and that means that we speak to our shareholders two or three, four times a year. We do so after publishing the quarterly figures. That's when we have our talks with them.
Well, quite honestly, I don't understand if investor relations, after having published magnificent figures, thanks largely to COVID. You can't convince the other shareholders to retain their shares, and they sold because he managed to accumulate a 25% share within a year. It's incomprehensible to me. Your investor relations department is not doing good work. They're not publishing right. Something's wrong. You need to publish far more forcefully and far more clearly, because who's going to leave the ABP pension fund is going to sell if the share goes up to EUR 10 because they'll say it's not a sustainable company. That's crazy. A pension fund should have good quality and sustainable shares. They should trade in sustainable future shares. It's obvious that everybody wants to be sustainable. I'd nonetheless like to respond to your investor relations department.
It has not been conveyed forcefully enough. Which party sold? Which parties left? This makes sense, and I didn't envisage this, but on November 8, this investor held only 20%, but that's 25% now. I wonder whether this serves the interests of the Dutch state. Perhaps the state previously, Wopke Hoekstra and now Sigrid Kaag could see whether it might want to acquire more shares in PostNL because if it holds 30%, he'll be expected to make an offer for all the shares. I don't think that's desirable for PostNL, which is crucial, like water and gas, but then mail and parcels. I think it would be a very good thing if the conversations with the government are conducted more intensively.
They should be scaled up because it would be nice for PostNL to be to remain PostNL and not become Post Czech Republic.
Yes. I think what the previous speaker was saying about who we said goodbye to and the question of Mr. Swinkels at the same time. Let's deal with them both. Well, I think it's a good idea to keep looking at the facts now. Anytime that a shareholder surpasses a particular threshold of share ownership is published by the AFM, every step is completely public. The market can see it. You can keep tabs on developments. What's important, I think, is that investor relations are constantly in dialogue and are constantly seeking dialogue with shareholders in order to keep the equity story and the strategy known. We don't need to do that for shareholders. No, we do it for analysts who follow our shares and so on.
It's also worth bearing in mind that as of the beginning of 2021 until the end of 2021, PostNL's share price went up by something like 37%, and that is significantly better than our peers' share price performance. I think that that is another thing you have to bear in mind when considering the trends you mentioned a moment ago. Now there's a number of players, and they've been shareholders of ours for years now, and they make choices regarding their investment policy. They decide to join us or to leave us. The composition of our shareholder base is something we keep tabs on as closely as we can. There are potentially new shareholders and former shareholders and current shareholders. Investor Relations is in constant dialogue with them, particularly because we want to tell them PostNL story, the equity story, and the strategy.
We want to explain that as fully as we can.
Yes, Mr. Chairman, I understand this. You say that we had a return of 37%, but the share price was being bulldozed. We're talking about EUR 2.88 now. At one point, we had a disastrous rate of less than EUR 1 for the share. It's almost become a penny stock. It's easy to do the math. Many investors, some did something different. It kept me awake at night, too. It was a disaster for me. Okay, it increased to EUR 5. I think it's impossible to understand. Investors are in it for the long haul. They purchased it when it cost EUR 1, and then they'll go for a 37% return. You're not very convincing. The share price was on a collision course. You're not very convincing at all.
Something must really be wrong. I read that this major shareholder also holds a large share in a company in England, as far as I know. Well, Herna said.
As I said earlier, we're in constant talks with this shareholder and also with any other interested shareholders. We get in touch with them every time we have the quarterly figures and the half year figures and the outlook figures. We are treating this player just like any other shareholder. That's all I can say about it.
Okay, well, I'm glad we do decide to deal with any other business. Mr. Van den Bos.
Finally.
I'm sorry that I'm requesting the floor again. I've held shares in PostNL for 16 years, and I'm very involved in that. I said, "How is it possible for share price fluctuations of EUR 0.11 or EUR 0.15 to happen in a single day in a fairly defensive company with a high dividend yield?" It was impossible to get an answer. I asked the bank. It's impossible to find out what's happening. The only point is that about 50% is held constantly. There are a few shareholders that have over 3%, of which Vesa is the largest one. My most recent information was that they had about 23%-27%. I do know that they increased their holding in Royal Mail to about 12%.
We're dealing with an awful lot of parties that sell without actually owning the shares. You can think of the obvious, and you can think of many other things, Mr. Swinkels. Excuse me. Anything is possible, and a supervisory board can't influence that. Sometimes I think that what's happening is very strange. Quite honestly, when I thought that the share was rising to about EUR 5, we sold our indirect investments in PostNL. In any case, I sold them, and they were repurchased at EUR 3.65. All I'm saying is, what is amiss with the share and the stock market manipulations? That's all I'm saying.
Okay. Well, I'd like to thank you anyway for all your comments, questions, tips, all your complaints. We will take careful account of everything you said. Oh, and also your compliments as well, don't just forget those. Thank you very much. Thank you also for tolerating the fact you are going home on an empty stomach. But, perhaps you'll take comfort from the fact that we're going home with an empty stomach, too. Thank you all very much.
Thank you.