PostNL N.V. (PNL) Earnings Call Transcript & Summary

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 20th of March, we were astonished by an act of Belgium transit system targeting PostNL people in Belgium and also the delivery staff and other delivery companies who deliver packages in Belgium. Budapest 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 increase in fuel prices and high inflation rates. Herna and Pim will deal with all of these points in rather more detail shortly. We've also got to bear in mind the COVID has not disappeared, although only very few restrictions remain. The Veris future cannot be predicted. And because safety and health are our #1 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 this 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 are registered to attend online will be able to opt to vote during the meeting as they could last year, and then 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 screen to your left and right. In addition, [indiscernible] public Koos Timmermans and online, we have our external auditors Ms. Overbeek of EY attending the meeting. She is responsible for auditing PostNL. In addition, next to Ms. Overbeek, we also got Mr. Niewold from EY present online. He signed the auditor statement regarding the nonfinancial 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 also 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 the proposal to nominate her, which is on the agenda for today, a warm welcome to Hannie as well. Next, we have -- we have the Board of Management, Herna Verhagen and Pim Berendsen and our Secretary, Ewout de Wit, he's to my left. Herna will be taking today's meeting minutes and there will be made available on the PostNL website. In accordance with the Corporate Governance Code, the draft minutes will be available no later than 3 months from now, you will then have 3 months in which you can comment on them. After that, the Secretary and the Chair of the Supervisory Board will adopt to this. If you wish to receive today's minutes on -- by post at home, you can just email Ewout with that, you will find his e-mail address in the notice concluding 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 -- posted on our website and the press report dated 8th of March 2022. The registration date was the 22nd of March 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 registered 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 of 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. But 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. So it's not at the end of each agenda item that we'll know how the votes have gone. So we will remain in the suspense for all the voting outcomes until the end of the meeting. A couple more practicalities. And 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 3 questions per agenda item. I'd also ask you please to state your name clearly before you put your question forward, and 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 3 questions per agenda item. I'd 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. So you may not see your own question verbatim. And if we already -- if a question comes in we have already answered, we have considered 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, and 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. To Pim Berendsen, who is 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. And 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. And 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 at part of postal items in the Netherlands. So 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. And in the past couple of years, our company had derived 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. And of course, we've launched initiatives in our surroundings and socially, so environmental and social initiatives. And 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 first quarter of 2021 was one of the optimal synergies from the consolidation of spend 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. And from 2023, it should support our normalized EBIT. We initiated rolling out the parcel, 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. And 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 first fully automated robotic sorting center, and we're very proud of it, it's in Nieuwegein and is 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 tractors 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. And we also received some awards in ESG. One is the Dow Jones Sustainability Index, where we made it into the top 5 of all logistics companies in the world. And 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 EUR 308 million, 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 normalized comprehensive income is 42.2% higher than the year before, and this too exceeded our guidance. And 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. And our -- we tried 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 to 3 clear proposals. One is within Parcels, which concerns managing profitable growth. And 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 at the moment we acquired Sandd and managing for value means that we position mail clearly in the value chain. And during COVID-19, we saw especially in direct mail increased interest by purely digital companies such as Uber Eats. So we aim to keep PostNL accessible and that should yield a strong EBIT and strong cash flow in 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 should 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. So 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. So for 2 years, we were open and operated our networks without major corona outbreaks, but 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 2-tier board system, as you know in the Netherlands. And we engage in clear dialogue with our stakeholders annually in group and individual discussions. And we have clear business principles, which we described in the annual report as well. And we're also part of the UN Global Compact. And 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. And despite COVID-19, we see that absenteeism due to illness increased by 0.1%. It's about 6%, which is slightly higher than if we were not in a COVID-19 year, but 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%. And you can see that on the emission-free last kilometer, we're at the same level as we were in 2020. And some of the acknowledgment concerning ESG leadership appear on this slide as well. I'd like to say a bit about social value here. And I'd also like to mention Belgium. 53,000 people work for PostNL. 70% work for us directly, 30% works indirectly for our 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 regulation. That means that all of these 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 a parcels company. They have a collective labor agreement for PostNL or the collective labor agreement for postal deliverers. And 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 confederation such as the FNV. Belgium in total 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. And sometimes, that makes things complicated. And it's also hurtful to see what is sometimes written about PostNL and especially to see how that impacts 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. And you've already noticed some of this. 93% of the delivery partners we work with in Belgium is satisfied -- very satisfied about the working relationship with PostNL, the legal framework where we work. So the legal foundation is used in many sectors in Belgium, not only transport firms, but also at the end harbor and aligns with what you would ordinarily say. And we have very rigid controls. We already have them in place. And 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 are 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, at least, we 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 2 years ago. And we acknowledge that and identify with that. And that's one of the reasons why we are investing EUR 60 million to 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 a strong growth in packages and 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. It was 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. So in March, we also opened the first to 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. So 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. And you see that on the right column of the slide in which we explain how we'll be adapting our organization 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 that we also focused on the digital transformation, and we'll be investing EUR 80 million between 2021 and 2024. And at the front end of the organization. So within commerce, and we do that in our logistics and operations. And we're also doing that on the platform where we are active and aim to expand. In those EUR 80 million that we'll be spending on OpEx and CapEx are not only about 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. And 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, and 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. So in many areas, we see that transition to digital channels and products, and it continues. We're on track executing our strategy fit between 2018 and 2021 established a very solid financial foundation for a company that gave us the opportunity to invest and to accelerate digitalization, and also gave us the opportunity to accelerate investing in sustainability, social aspects and, of course, in expanding capacity in parcels. And that was my section. Jan?

Thank you very much, Herna. And now I'm pleased to give the floor to Pim.

Thank you. 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 consistent of what we call nonrecurring impacts. That is to say we managed to identify things from products and so on, which are basically COVID-related. EUR 40 million of that is clearly in the Parcels segment, and EUR 26 million of that is Parcels Netherlands. And EUR 15 million is in Spring and Logistics. And then EUR 42 million was assumed to be nonrecurring Mail in the Netherlands. So if we correct for that and we look really at quarter of 2021, we've got EUR 226 million result collected for nonrecurring items. Now we achieved that because we delivered 384 million parcels in 2021. That is a colossal achievement and 38 million of that is assumed be nonrecurring. 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 nonrecurring, firstly COVID-related letters about inviting you to get vaccinated. You need ID documents. People haven't got the things so a lot of post, in created the whole vaccination program, which led to a minimal downturn in volumes in Mail. Looking now at segment by segment. Well within Parcels, almost 14% of growth in volumes, 384 million were delivered, looking very -- of EUR 2.3 million. Normalized EBIT, EUR 230 million was at EUR 209 million year before. So that's EUR 21 million improvement, thanks to good operating performance, operational efficiency, but also really good logistics in -- an improvement in logistics. So we could basically say that there's 2 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. But from the 1st of July 2021 onwards, the low value of VAT was abolished in the EU, 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. And then, in addition to that, towards the end of the year, we had significant supply chain issues because of friction in the cargo market. 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. So that also had a bit of a negative impact on Spring. But all in all, it was a really good performance within Parcels. If we now move on to our other segment, Mail in Netherlands. Well, here we can see, as Herna said, volumes are down by 0.3%. But 67 million of that is one-off nonrecurring income over substitution, essentially, substitution of physical volumes. And it's still about 5% going from physical to online purchase, if you corrected for the nonrecurring COVID factors. It's important to note, we expect the downturn in volumes to continue into the future, which means we're going to have carry on finding ways of cutting costs in the Mail in the Netherlands and obviously keep things going. Normalized EBIT, EUR 160 million in 2021, of which roughly EUR 40 million is nonrecurring. What's also important on the revenue side, we sold Cendris for customer contact in 2020. So that will show through in the revenue and EBIT figures in the future when we talk about Mail in the Netherlands. Now when it comes to our performance in 2021, we can see that we have a lot of volume, but cost cutting to about EUR 26 million is part of the end result. And as Herna said, at the beginning of this year, we had the integration of Sandd, which has nonrecurring costs, that had a positive effect of EUR 29 million compared with the previous year. Now having noted on the results. I think it's also important to have a look at one of the other financial metrics. This is cash flow. And we can see 3-0-8 is a nice figure. But that came together with very high performance on free cash flow, 3-0-8 normalized EBIT result, and this led to 2-8-8, EUR 288 million free cash flow. You can see that the last line on this slide compared with the EUR 186 million last year. So I think it's worth looking at this. You can see one further orange stripe just look further up the graph. Free cash flow before exceptionals, EUR 238 million in 2020 and EUR 304 million in 2021. Below that, there are 2 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 leads us then to EUR 186 million as the figure at the front of the slide, EUR 186 million for 2020 and EUR 288 million 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 trend in working capital, EUR 41 million released. And then you can see also the normal items there on the sheet. So 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 or EUR 407 million net debt to EUR 203 million net debt. And if you look at the leverage ratio, the way we're funded, in other words, you can see the facility about 0.4 of difference. And that's important because, as we told you earlier, we have a special capital allocation funnel. We call it a road map, which we used to look at to see what we paying, what is happening as a result of the achievements of transformation in PostNL. And 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 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. And that means that we are investing in the digital side of things. We also want to get new proposals on to the market as quickly as possible, and we will have operations as efficient as possible by using IT, using data and also looking at new opportunities. So those are the first and 2 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 to be 70% to 90% payout ratio. And finally, we're looking at the options to strengthen personnel's portfolio further and look at possible acquisitions out there, which, in the 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. But that means a very strong cash position, very strong cash flow and that was strong in 2020 and 2021. As we said, the share buyback is coming in, in 2 slices. The first EUR 160 million to EUR 170 million is to be carried out now. And the second slice will be 2023. And 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 to EUR 0.06 in the 2022 to 2024 period. So currently, you can look and which we say morning at our website, the Investor Communications section tells you how things are going with our share buyback program. And this morning, it's on 11.8 million shares bought back out of the roughly 51 million, which we plan to buy. So that's roughly EUR 41 million to EUR 42 million that we've spent out of our tranche of EUR 160 million to EUR 170 million. Now what about the outlook for 2020? Here, we had a look at the market on the 28th of February this year and sketched out a view for the future. For the normalized EBIT, we're expecting EUR 210 million to EUR 240 million. Compare that with EUR 226 million, which is corrected for nonrecurring COVID items in 2021. Regarding free cash flow, we're talking about EUR 110 million to EUR 140 million, and normalized comprehensive income roughly EUR 200 million. So 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. But 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. But this is the outlook that we came up with on the 28th of February. And 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 close the floor. But I'd just like to say 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. Most of us 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 #1 priority and always has been. A tremendous performance. We and the Supervisory Board, I think, we can be very proud of it. I'll now give the floor to Koos Timmermans, Chair of the Audit Commission, 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, Mr. Overbeek is the person primarily responsible for auditing and Mr. Niewold is also here today. He's a person who signs the nonfinancial performance statements from the auditors. Well, this year, once again, the Audit Commission and the Supervisory Board and the Management Board have had very positive talks both within the 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 I think. We particularly focus obviously on the operational and financial impact of COVID-19 for PostNL. Other recurring issues discussed together again with audit committee meetings were the most important financial factors having an impact on the strategic plan rollout and the financial results curve for PostNL. The interpreter can't hear the speaker.

I'll continue. I'll carry on. Unfortunately, Mr. Koos Timmermans is inaudible. Very well. I'll continue now. After all, I'm a member of the Audit Commission as well. You have to wait a moment. Other recurring topics in the Audit Commission 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 and economic and market developments and so on and so forth, as well as IT and cybersecurity, were I 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 1 July, 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 we discussed, the Audit Commission also has ongoing discussions about integrity in which possible fraud and alerts by whistleblowers are addressed. Based on the analysis shared with the Audit Commission, we've concluded that in 2021, no material fraud cases were observed. In addition, the Audit Commission 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 Commission as well as other Supervisory Board members regularly spoke with EY and the Head of the Internal Audit without the management present. The EY's most important findings appear in their statement that appears in our annual report from Page 228. This year, our EY's audit was largely conducted by remote, and discussions and meetings largely took place online. And 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 Commission once again believes that the Board of Management and its decisions and actions took a realistic approach to the Audit Commission. I 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, that this would be difficult to do myself. I would hope to -- I give the floor to our auditor, Ms. Overbeek.

Thank you very much. Can you hear me? This is Overbeek. Good afternoon, ladies and gentlemen. I'm pleased to take this opportunity to elaborate on the audit that we 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, the Board of Management and the 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. And of course, afterwards, I'll be happy to answer any questions that remain. As in previous years, we issued 2 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 nonfinancial 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 nonfinancial information was issued by my coworker, Jan Niewold, who is also present online. But 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 by remote, and we conducted alternative activities to enable working by remote. For example, checking documents electronically, and we convened a lot of meetings by digital media before we started -- before we start our audit, we inventory what in our view 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. And for 2021, we set the materiality at EUR 15 million, and base 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 so that we were able to take responsibility for auditing the corporate financial statements. We also involve 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 fraud risks as well as the risk that the firm might not comply with applicable legislation 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 noncompliance 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. And 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 target 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. So 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. But 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 and our audit statement. We included additional information about these key what it matters such as the risks 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 nonfinancial and other sustainability information as included in the financial report, meet the international guidelines applied. This means that we determined whether the nonfinancial information accurately reflects the policy, activities, events and performance and sustainability. And we checked the reliability calculation of some performance indicators such as CO2 emission by others. We also determined that these most important indicators have been sufficiently explained in the financial statements. Finally, we assess 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 auditor's opinion for the financial statements, including the nonfinancial information and statements. This means that based on the duties 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, [Audio Gap] as for the material patience in the nonfinancial information, we conclude that this information [Audio Gap]. In addition, we assess information in the annual report and have that no material inaccuracies appear [Audio Gap] we have [Audio Gap] discerning relationships [Audio Gap] 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 [Audio Gap] 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. And 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. And of course, we will give you answers.

Who shall I give the floor to? I see there 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 3 questions. #8, microphone #1, please.

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. But this is the second time that we've had this question arising. And one that opened in post again, now I've had some experience of Belgium drivers. And we know that sometimes that goes with as you might hear, the rear of the vehicle can be damaged. Sometimes they have reverse 2 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 with her disease. 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. I got there -- arrived with them and see how they [Audio Gap] in the Netherlands as well, [Audio Gap] we sorting of it [Audio Gap] and in residential area. Are you going to be reorganization? [Audio Gap] No issues here. It's all settled down. So we're wondering what's still [Audio Gap] 2 or 3 questions. Yes, I've got 3 questions.

Would you please take a seat and we'll start by answering your questions and then give others a turn to ask questions. And I think that Herna most of those questions, if not all, are for you.

First, [indiscernible] 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, our Belgian firms, SMEs, delivery partners. And they generally employ various people that 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 of that 1,500 parcel drivers work for those delivery partners hence the balance. And 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. So the new logistic infrastructure, that's NLI because then we're closer to the 8 points of issues, so we don't have to drive as many kilometers from the sorting centers to where the package is distributed. So we have 26 sorting centers, and we're going to open a 27th soon. But we want to be closer to the consumer [Audio Gap] as many kilometers and you don't [Audio Gap] So we're not -- this is not to reorganize but this a deliberate choice in the past [Audio Gap] We do process larger volumes and [Audio Gap] according the acquisition [Audio Gap] of the ministry [Audio Gap] and filed against that one. And that's what is still pending. And we hope that around the summer, we will receive the judgment on that 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 mill process that will be outsourced to subcontractors? Mr. Haralson.

Yes, in -- well, in the Netherlands, if you're talking about the mail process, the mail deliveries work for PostNL. So we had not outsourced those. The only type of partnership we have there is with social workplaces. So 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. [indiscernible]?

My name is [indiscernible]. 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 then we talk about staff as fair enough. And how do you think shareholders feel? If we are shareholders of a criminal organization. Shareholders after all, own the company, don't we? So 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 it's not actually a budgeted amount, it's an amount that might be, but it might be EUR 300 million, it could be EUR 350 million. My next point, Belgium, now you all know Minister [indiscernible] and [indiscernible] received an e-mail from me because I felt extremely offended to be labeled criminal, and I'm sure that applies to many other people in the room to cut the long story short. This is basically the reply that -- it's not just PostNL and the people who work there. But there's a lot of other companies as well, including GLS, EPD. And another thing he said was that -- how shall I put it? Belgium legislation is just not good. If [Audio Gap] PostNL in Belgium [Audio Gap] I'll be happy to send it to Mr. [indiscernible] 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 said documents on to the financial [indiscernible] newspaper. I'm sorry to say they didn't do anything with them. All I think is newsworthy. It comes from Minister who's in the hot seat. And I think actions should be taken. That's all I want to say for the time being.

In my view, you hold shares in a decent company. And that's what I started by saying with clear standards and values and business principles and designed to comply legislation and regulation. That's the foundation. We've been working that way for well over 120 years and EUR 450 million is not etched in stone. And I said a bit about that mast -- the money is being spent according to actual growth in Parcels. Of course, you always estimate what you expect for Parcel growth until 2020 or based on trends and conversations with clients. But you do the actual spending when the growth occurs and exactly how much it will be. Mr. [indiscernible], 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. So 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. And our ESG-related investments are included in that such as the rollout of augmented parcel, lockers, APLs. There are great many investment decisions that we will keep assessing with respect to their added value. And if it's not necessary because we have capacity then it's always nice to use existing infrastructure to facilitate growth, but it's also logical. If you project duty in our view, to state the expected corresponding level of investment. So we need to be as transparent as possible in both earnings and cash flow. That's how you should see and we can take the -- what we consider to be an 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. And I think it makes little sense to engage in politics.

May I respond briefly[Audio Gap] And I would just like to say, [Audio Gap] investors for Sustainable Development. We've been coming to you -- posted our shareholders' meeting for many years now, and we always enjoy engaging with you and with the other shareholders. Now today, there's 3 topics I'd like to speak about when it comes to PostNL, well, 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. And you are right to give it your attention. 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. And rather more punishing action taken so far. Now you were both -- were saying 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. So I'd like to hear you something you can tell us about your future attitude. How you're going to be able to do with this better and more carefully in the future. Second topic is climate change and greenhouse gases. Now of course, there's a sustainable development Goal 12, we like referring to that one. We 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, we've got a good score on the sustainable development front and on the Dow Jones. That's very good. And we would like to challenge you to take things even further and improve your impact even further. This provides you with business opportunities. And in fact, you said that, you said that sustainable delivery options gives 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 into practice, and what impact is it going to have? Then the third topic, biodiversity. Yes. Now that might seem not particularly relevant to PostNL. I could imagine that might be the initial response. Sustainable development goals 14 and 15. But in fact, the World Economic Forum said this in a 2020 report, that biodiversity is one of the top 10 risks for companies. So we really would like to see more specific information on what the role of biodiversity is for you? And what impact it has? Like you said in your report that you promote the protection of biodiversity. But we'd like to -- what is the potential risk? Or what is the dependency and where we might we 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 because you operate your with motor vehicles. You said you're working here on your buildings as well. But I imagine [Audio Gap] not to identify risks and also [Audio Gap].

Thank you. [indiscernible] is to take action and we strongly try to strike a balance between [Audio Gap] making [Audio Gap] explicit about the social policy we aim to apply and the values we represent. I can certainly commit to that. However, we will continue to protect our employees. So 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 and when do you want your parcels so that you know somebody's home and you don't have to make several trips. We'll disclose more about that. There's no problem because we're very proud of some of those delivery options. Now to disclose the exact improvement impact for each delivery option is not always easy, but we'll do our best there. As for biodiversity, 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 Devo and the sustainable development goals, but also in the EU taxonomy. So we'll be noticing it more there as well. So it means that we're certainly working on it and we'll continue to do so. And in 2022, we'll be conducting the initial risk analysis there. So we're involved in a lot of initiatives that I could tell you are all conducive to biodiversity, but we still have to perform that actual risk analysis, and we'll be doing that then.

Please go ahead.

[Audio Gap] From Public Affairs and Investor Relations. I'm delighted to see good results. And I think that current events in Belgium [Audio Gap] sustainability development in the Dow Jones. And [indiscernible] achieved that and can improve it even further with investments. I'd like to give you an example, [indiscernible]. 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. Supermarkets, I said to them and PostNL is good at delivering. And he said he would have a work with [indiscernible] about this. So I'd like to know whether he already phoned you, have you heard from him? Secondly...

What is your question?

I don't know whether -- here will be able to get into that further. And PostNL could do a great deal, could take on a great deal of grocery deliveries, I think because this been good at making deliveries. Secondly, [indiscernible] is favorite delivery company, well, various items that mail can be delivered. But I think if you look at Greeks, for example, they huge increase in cards being sent, for example, so perhaps based on good by grids. I think that as a suggestion. I wonder whether it might work. So what can PostNL do on that front? Another point, something which is really a short coming for PostNL is sponsoring. There's no large posting on football or skating or whatever. But sponsoring is very, very good for a company's name recognition and image. Look at KPN, look at [indiscernible] and all the other top Dutch companies. that could by design boost PostNL's standing. And when it comes to biodiversity, well, you could consider sponsoring artists, for example, artists at least 15 million in the red at the moment, perhaps PostNL can do something on that front. Then there's arts. There's a lot of art organizations in the Netherlands, art fairs, the [indiscernible] perhaps PostNL could get involved in sponsoring them because there's an awful lot of work about are sent as parcels to those art fairs. This could be very profitable, I think. Finally, or toothing actually, Cybercrime is everything data-driven these days. And that means that if PostNL is hacked, then everything will grind to a halt. So I'd be interested to hear what your views are on this and also what the auditors think about this? Next, inflation and price exploration. The whole world is affected by this. We can see that with COVID, we can see it from Ukraine, and are people at the door of a hotel -- we're talking about the EUR 14, EUR 15, is it? And 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 cost. I think that's actually not very much. I wonder if you could look at ways of addressing that issue as you could get together with other organizations in the public sector and so on, to see what can be done. That's my specific question.

Herna, perhaps you and Pin can share those questions.

Very good. I'll answer the 4 questions. The first 4 questions about cost inflation and some others. I'll be speaking with Dr. Pullock soon [Audio Gap] I believe that the acquisition of [Audio Gap] we need to stick to what we do best so that means that [Audio Gap] people to send cards in [Audio Gap] we often team up for that based on the [indiscernible] Foundations that we promote [Audio Gap] that on special days such as Valentine's [Audio Gap] are worked together extensively with the greeting cards business. Now sponsoring, that's [Audio Gap] good. PostNL has deliberately uptaken [Audio Gap] to spend the money [Audio Gap] the good causes. So we support various good causes [Audio Gap] which is a bad birthday in the Netherlands whose parents don't have [Audio Gap] we deliver parcels [Audio Gap] so that I hand out something in class. [Audio Gap] And we have a big campaign every Christmas [Audio Gap] just [Audio Gap] children [Audio Gap] deliver unopened or bring them to which we will give them to the children. These parents don't have money to give them gifts. There's another type of sponsoring efforts that they fund for the older [Audio Gap] to enhance our company to contribute to that rather than [Audio Gap] against loneliness. [Audio Gap] We are parcel who are in help identify by lonely people [Audio Gap] in the Netherlands, they can call a certain number, and then we see that we're active [Audio Gap] a lot of good things in there [Audio Gap] durably curtailing association and happiness. It depends on how you decide [Audio Gap]. 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, we were 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 will include penetration tests and see which connections are open. We have an important security layers surrounding them to ensure the continuity of our most important networks and we checked 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 storing 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. And 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've seen will indicate inflation at a level of 2% or 3%, no more than that. But 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. And we're also going to see to what extent we can adjust our pricing policy given the contracts we have. As per 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. So I think that answers Question 6.

Well, I've got 2 further points on cyber crime. Now the professional teams, the professional hackers find their way in everywhere. The second thing is the government, the government is often very insecure. And imagine that someone as into the national tax service, the whole country will go bankrupt, every person will go bankrupt. So it's really a 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 helping hand. That's something to bear in mind because if the balloon goes up, it will be trouble for all of us.

Mr. Frank, 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. [indiscernible], 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. How the firm has used cyber [Audio Gap] has procedures to [Audio Gap] interest reporting and following up on any cyber incidents. We don't [Audio Gap] I think it's important to note [Audio Gap] we had a big game like very [Audio Gap] being better and better. And the risks we remain alert and PostNL focused their measures [Audio Gap] we've done in the past as well.

Next, the lady where [Audio Gap] I kept looking past you.

I work at PostNL [Audio Gap] because the effort is a shareholder in PostNL [Audio Gap] We can ask questions in a meeting such as today [Audio Gap] 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 metrics of 2021. So my question is, where has it gone? [Audio Gap] rather following on from the previous speaker. I think that in the Netherlands, [Audio Gap] and I think that after the army and the police it's you and 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'm at EUR 10 an hour. [Audio Gap] Now we could have endless debate with shareholders about whether that's gross or net. But I think everyone can agree it's not very much. So a question perhaps, [Audio Gap] does he know how much he earns per hour? It's rather the contrast between the lowest and highest owners. And 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 the Netherlands go via contractors, subcontractors. I didn't hear -- I didn't see anyone saying you want to get that percentage down. Now bearing in mind what I can see in the cross docs [Audio Gap] short-term contracts [Audio Gap] being on a short-term contract for 10 years and [Audio Gap] contracts. I'm not only talking about delivery stuff. [Audio Gap] This is people multi [Audio Gap] how do you see a way [Audio Gap] offset of the company. [Audio Gap].

Reality matrix [Audio Gap] prices and all the measures that we took to the build the work setting during COVID-19 pandemic [Audio Gap] What you see at the top of materiality [Audio Gap] what is it to year-end health and safety [Audio Gap] parcel deliveries and [Audio Gap] negotiated by TLN, Transport Logistics Netherlands, and that in terms of employment as well that there is inflation impacts disposable income. Obviously, figures in the negotiations and is certainly a factor in what we offer the trade units because we also see that certain changes are necessary there. If you look at remuneration as you mentioned in the annual report, I'm not sure exactly which page, but it was in the remuneration page. [indiscernible] 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. And I believe that it's a ratio of 1 to 23 or 24 in my case. And 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 impact, reducing deployment of flexible staffing. I've mentioned that about 90% of all people who work with and for us have an employment agreement. So 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 were -- that had temporary employment contracts. We offered them permanent employer employment contracts and about 1,400 employees took us up on that offer. So aside from the flexible layer that we have being only 10%. Of course, you can argue whether that's a bigger or thin peel, but you need some flexibility to accommodate peaks and rows in our company. That's one. And 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. I have to respond to the speaker from [Audio Gap] clock. Well, 8 years ago, [Audio Gap] every shopping. I think it's [Audio Gap] father was in charge of that point, delivering people shopping. And it didn't work out well. [Audio Gap] Mind when you're talking to Mr. Clock. [Audio Gap] I mean, if I said [Audio Gap] I've been of [Audio Gap] I was told that both in Parcels PostNL deliver is better [Audio Gap] you're paying more than competitors, DHL, [Audio Gap] compared to even worse [Audio Gap].

What's your question?

I'll ask. PostNL has come up with excellent [Audio Gap]. I'm very pleased to see that because there were so many [Audio Gap] senior fee, and it's even better [Audio Gap] Now I will break my word, I would [Audio Gap] to actually have a share buyback. [Audio Gap] Well, [Audio Gap] we can see a reduction in the number of [Audio Gap] but I'm not happy with [Audio Gap] when it comes to the auditing in EY and others [Audio Gap].

More than comments wrapped up in questions, yes.

Yes, indeed. We're talking [Audio Gap] 8 years ago [Audio Gap] this all the [Audio Gap] delivering for supermarket, all the [Audio Gap].

[Audio Gap] to whether the number of items in the management letter has decreased or not. And 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, explains [indiscernible]. If you look at the management letter of 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. And 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 where the deal did close this year, but the books were carefully scrutinized in recent years. So in recent years, there was a decrease in the number of items specifically because management follows up on what we raised in previous years. So we appreciate that trend. And 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. So I would say that we do more than tick the boxes, we broaden the scope to see what's relevant for that organization and tune our duties accordingly. Now I'm looking -- yes, we have quite a few questions. The gentleman over here. Yes, you have the floor, sir.

Yes, I've [Audio Gap] I've been waiting to speak. My name is [Audio Gap] fact I would like to raise today [Audio Gap] normal [Audio Gap] you say that's a very fine agreement. But what about the actual satisfaction? What about what their leaders have agreed with you? [Audio Gap] Being boss is to agree to something [Audio Gap] which even if you to talk more often to a normal [Audio Gap] you actually have to deliver the parcels. Second point [Audio Gap] recently got involved in white goods delivery [Audio Gap] washing machines to private homes and connect [Audio Gap] it's really pretty different and then being back 10 seconds later [Audio Gap] To what extent you can really get synergy from the is. [Audio Gap] and washing machine is an enormous thing, allowed to deliver. [Audio Gap] You can have [Audio Gap] taken on this because [Audio Gap] price is going to not go up, price has not gone up. But here, it makes it different achieve any further performance [Audio Gap] business [Audio Gap] We have 3 [Audio Gap] there's a limit to what you can do, and I feel disciplined [Audio Gap] as a shareholder that you agreed to freeze prices was [Audio Gap] massive fuel increased, fuel price increase [Audio Gap] among the unions and information, which might be [Audio Gap] was a bad [Audio Gap] negotiated [Audio Gap] I'd like to know [Audio Gap] what you well, [Audio Gap] point I'm [Audio Gap] deal with [Audio Gap] how can people [Audio Gap] to be able to buy an electric delivery van in a few years' time [Audio Gap] people. [Audio Gap] We give them a financial helping hand [Audio Gap] so that they because I see it preliminary on the basis of what you're currently paying them [Audio Gap] or what you're doing to delivery company [Audio Gap].

[Audio Gap] this one, Herna?

Yes [Audio Gap] Important in part [Audio Gap] by riding along [Audio Gap] anticipating in regular meetings [Audio Gap] and 4 times a week because it's important for us to remain [Audio Gap] these are and especially because only as [Audio Gap] employed by PostNL belong to trade unions. At the end of the [Audio Gap] trade union representatives that we interacted with, and I hope that [Audio Gap] the trading in confederations that if trust is into the [Audio Gap] trade union executives that [Audio Gap] and speakers inaudible [Audio Gap] I understand that but [Audio Gap] with a trading representative [Audio Gap] and I hope for the PostNL trade union [Audio Gap] in response to PostNL [Audio Gap] are not compatible with parcel size and weight, but for PostNL has run extra at home, which [Audio Gap] you generally need 2 people to deliver and [Audio Gap] washing machine [Audio Gap] so forth and the synergy that we achieved [Audio Gap] the cost of steps by about half of the rate pipe. The rate of inflation plus half of the decline in 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, 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 use that. But the fact that we were unable to increase the cost of steps in 2022 doesn't mean that we can't do it in 2023 through 2024. As for an electric delivery vehicle for subcontractors is important to us if you consider our environmental objectives and CO2 targets then from 2025, we aim to make our delivery partners greener, and 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 and [indiscernible] our own [ delivery ] people, others as well and we're boosting that market. So 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 [ Rainen ]. 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 even got out of my car, the police were breaking it up. And I think -- I would think that's the kind of thing they 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 [ mob ] to say it is not acceptable for a civilized, well-behaved demonstration to be broken up. It is not acceptable.

Okay. Ewout, perhaps you can explain that this -- it was not our call.

That's correct because it was on the hotel's own premises, and the hotel people didn't want it. They were asked to move outside the gate, but they were still allowed to continue over there.

[ Inaudible remarks from the audience. Interpreter apologizes. ]

Well, we can deal with the Marriott hotel about this because it was not our call, we did not start that and I think that's how we'll need to discuss it [ explains Herna ].

Agreed. Yes, sir? I will need to be a bit stricter, but you'll get your turn afterwards.

My name is [ Winkel ]. Firstly, I'd like to make a comment. The slides on the screen today have got the wrong date on because they're all dated April 2021. The slides you showed us, they've got the wrong date on. I think they've got the date from last year's shareholders' meeting.

Says financial year 2021.

On the slides themselves, you can see them. I haven't got them printed out, but I saw it on the screen. It says 2021, but that's just my quick comment. Now my question, I've been a PostNL shareholder for a very long time. Ewout knows this. But just going back in through history, PostNL, [ we used to call ] TNT, and then TNT was broken up. We got PostNL. And TNT was a parcel delivery service. [ Okay. I thought, okay, ] we've got PostNL, they'll be delivering the post, would they? Now PostNL now delivers parcels. Now you've had a really good couple of years behind us now because of COVID, really did give us a helping hand. But also, if we consider what the FNV trade union lady was saying, what you [ ought ] 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. So 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. We've -- COVID-19 is behind us now. Well, let's hope it's not going to make a come back. Consumers are going to go back to the shops again, aren't they? Actually going to shops. And when I look at the future, [ what about ] all these parcels from China? I get the -- and the parcel I paid [ EUR 2.30 ], and then PostNL delivered it to my letter box. So if I look at the tariff in the Netherlands for PostNL parcels, that's a lot more money. But my question to 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've said before, we've had 2 fat years for parcels. But 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, okay, I've got some misgivings about that. Yes, indeed. But what's your view? And also Supervisory Board, why all this attention for -- investment in the strategy? I can't see it, all this. Otherwise, it's going to be lots of takeovers. And perhaps you already got some takeover talks already going very well. And I'd just like to say, you've got these 2 divisions, the mail and the parcels, that are 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. And the fact that there's a company that -- 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 2 years of COVID, there has been massive growth in parcel. But even in the preceding years, the growth was substantial. So surely, if you're talking about the future, the 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. So 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. So 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, and 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. But we don't want to overinvest the growth engine behind PostNL. The years ahead is parcels.

Now in your introductory words, you mentioned China. And that was [indiscernible] to be transferred. But what sort of impact does that have for deliveries? Because [ I can hear ] people saying this is all because of VAT and people order goods online and so on, and if it's more than EUR 25, that 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 nonrecurring 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. 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 nonrecurring COVID. So 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 only about -- is below that level. So overlooking the international section, if you disregard the nonrecurring COVID section, then you've still got a growth in excess of 10% within parcels. And 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. So 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% to 17%. And 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. And as long as we can maintain 8%, we're creating value. And obviously, we're monitoring that carefully. For each investment, we need to achieve a return of about 8%.

And you also asked, and as you'll know, we discuss this at each meeting with the Board of Management. And I think another important difference is that we have extensive analyses of the COVID effect in the past 2 years. This has been taken into consideration. Now I promised that gentleman the floor.

[ Gert Koster ] 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 make [indiscernible] and I'd like to start off with what I'd like to call social value and the social value -- how does that fit 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; and finally, what I think is the most important point of all, these ratifications, 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 noncompliance, 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, noncompliance 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 a view that reporting over the Belgian results, how should I put it, has always been rather sidelined. But in fact, the Belgium profit margins is 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. But it's more than -- amply more than double. And then rationally speaking, you should say -- ask yourself how is that possible because at first glance, it seems strikingly higher profit margin. And it could perhaps sound like a leading question. I realize that. But you could say, does that arise from the way in which we deal with our subcontractors? And could we imagine that there is exploitation taking place? And finally, this is an important aspect, the ramifications of all this. So firstly, the VEB Association of Shareholders did see that from the moment these first reports emerged in Belgium, particularly, some of your staff and managers have been taken into custody. That led to very extremely hot-heated responses from PostNL, extremely heated. But at the same time, we saw Ms. Verhagen not exactly coming to the forefront of things, [ not in ] responses or anything else. And 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? And what should the consequences be in the light of the extremely heated PostNL responses to what's happening in Belgium?

Regarding your first question, which concerns social value, noncompliance comes in many forms. I'm sure you understand that. And this means that if noncompliance is serious, we discontinue relationships. Noncompliance, as I explained in my presentation, fewer than half a percent of the inspections leads to the observation that an idea has gone astray. In those cases, we think that it's justified to give people the opportunity to obtain an idea so that they can continue -- the idea -- the ID -- when -- they can get their ID back and try the next day. So 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, but you need to consider the extent and the severity of the violation concerned. And the formulation we chose was because last year, there were 3 or 4 delivery professionals that were terminated. So in our view, that's a correct formulation of the facts of that year, which is that we did not -- 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. So 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.

Now 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 the parcel -- 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 we have no choice. And 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 have -- we are trying to ensure that we do that as best we can. And in Belgium, we decided that Liesbeth Kaashoek, Managing Director of Parcels & Logistics, was the spokesperson. And from networks and competitions, I was in the background trying to influence stakeholders to get our people released. So that's what's relevant. I think you have to do where you will achieve the most impact at that point. I -- anticipating the consequence is, in my view, speculation. And 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 Board 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 [indiscernible]. One of the earlier speakers was talking about [ slit-eyed ], 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 seen SMS messages that we also are doing that.

[ Unfortunately, there is another remark off mic. Interpreter apologizes. Speaker is inaudible. ] 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 de Bos?

Well, I think I have the 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. And Sandd was part of that. But 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 of 15 or 16 years. I was there when Koorstra was in charge, when Mr. Bakker was in charge, [indiscernible] great fun. But now, if I look at the whole of the market, people are unhappy with it. Then when we [ crossover ], 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. It's a state-owned company. And they can be as competitive with [indiscernible]. 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. But now you can ask questions relating to the report from the Board of Management and the Supervisory Board and the financial statements. This is -- so after this, we will discuss remuneration separately. Do you have any questions about agenda item 2B? Yes. You have the floor.

Thank you very much, Chairman. My name is [ Stevens ]. Now investments. We 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 some new items, some new device, it won't be delivered until like [ half through ] next year or 2024. That's one example, and there's many examples, of course, of things you need to order now and not going to get delivered until much later. We 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 were supply chain problems in some aspects. But if we're talking about justifying 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, it's 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. And 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. So then we're sufficiently liquid, and we have enough leeway on the balance sheet as a consequence of the 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're just going to say, okay, EUR 800 million cash. And then some of that will, of course, disappear for investments. That's already happened?

No, 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. So 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 '21 to '22. So the results of financing the company, the necessary investments in capital.

[ But that doesn't do about right ] that this year, you're going to have to wait for deliveries of things you're already ordering. So 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. It could also be a lease obligation that we disclose separately. But we have sufficiently liquidity and cash flow-creating assets to make the investments that we want to make. And that's the position that we got the firm into in recent years, and it was not always the case.

So this EUR 800 million and we've got to subtract a few millions [ from in our minds ] and the next year because we're going to be spending that next year.

So this EUR 48 million in cash, we try to create a positive free cash flow in 2022. So 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 and then we will move on to remuneration. Thank you. And 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, and I'm pleased to give the floor to Ad Melkert, Chairman of the Remuneration Committee, to elaborate on the remuneration report. And 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, as you told, the remuneration report for 2021 will be put to you for an advisory vote. Before we proceed with the vote, I 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 factor, it's also worth pointing out that at previous shareholders' meeting, you passed the remuneration report for 2020 with 98-plus percent. And the result of that, we talked to a number of stakeholder representatives and asked them for input regarding our remuneration report for 2021, and that did not lead us to make any alterations to the report. So 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 can make sure their safety and health was the #1 priority. At the same time, e-commerce and the transition in [ our post ] business will continue to change. And 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 the total remuneration of the Management Board is higher than it was in 2020. This is because of 3 things. Firstly, an increased long-term incentive, LTI, which in 2021 was compared with the value of the 2020 LTI, and that applies to the CEO and the CFO; and secondly, because of the index linking of the fixed component at 3%, that's in line with general index linking within the company; and thirdly, particularly for the CEO, a one-off payment to the pension on the basis of agreements arising from the evolution of the pre-pension. This is a one-off payment agreed in 2006. And it was not only for the CEO, in fact, because there's about 5,100 other members of personnel staff who met the requirements for that at the time have also received a one-off payment into their pension scheme. Thank you so much, Jan.

Thank you, Ad. Now we'll be pleased to answer questions that were submitted via the chat or those present. [indiscernible], please go ahead.

It's just a comment. And 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 got to put up or shut up, or you just have -- you have to accept it or resign. We haven't got a social plan. And that -- well, look, that's something we said again and again in collective bargaining. It is really a bare-bones agreement for the postal 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. So 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. And please, a 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? Yes. Thank you. Any other questions? Yes. The gentleman from the VEB.

Indeed, my name is Gustin 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. But against that background, I have a rising question. Did the PostNL Remuneration Committee say when the remuneration policy was changed, how you are 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 1x base salary.

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 we'll continue to do so. Thank you. Any other questions?

[indiscernible]

Yes. I didn't hear what you said.

I respect my elders. Now then -- this whole of the remuneration policy is 3% question. We asked the banks 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 we'll take the average of the whole salary a little up some and take 3% of that or we don't 2% -- perhaps 2% at the top and 4% at the bottom. The second point in order to keep overheads limited, you could 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 things to go well for the staff as well. And so 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 4-month pay when things go well. ING says either everyone gets the same share, whether it's someone from the Board or both delivery staff. I'm very much in favor of that. Then Ms. Verhagen's buyout, Well, 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. Then 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. And we are asking you to vote in favor of the remuneration report to approve it. And before we proceed with the vote, I can tell you that the list of attendees reveals that we have 1,128 shareholders present or represented at the meeting, which can cast a total of 254,776,087 votes, so 49.97% of the total share capital is represented. The powers of attorney granted to our Civil notary account 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.

I do this every year. Well, it's a bit different, in fact, this year because it's a hybrid meeting. So people in the room, you can use your 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 will 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 -- you cast your vote on an agenda item at any time. And all of you in the room or online can change your vote until voting is closed at the end of the meeting. And of course, it's your last vote which counts. And as the Chairman said earlier, we won't know the voting results on all the agenda items in all at once at the end of the meeting. When voting is closed at the end of the meeting, we will display the voting results item by end item on the screens. And these will be the results of the votes cast by you during the meeting and also the proxy votes. I'm now giving the floor back to the Chairman.

Thank you, Ewout. And I assume I can continue with the meeting. So you may now cast your vote regarding the remuneration report for 2021. [ voting ]

Remark of mic inaudible. I was afraid of that explains the Chairman, Jan Nooitgedagt additional inaudible remarks. Could anybody from technical support, please step in?

Perhaps just for the sake of completeness. Voting on all agenda items is open now. So if you wish, you can already vote on the line item. You don't have to. You can wait until each agenda item is discussed if you prefer.

Just looking around. Have we had the problem out? Yes. 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. So 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. The remuneration policy was agreed in 2020. Now a new remuneration policy is being put forward. Drafted in line with legal requirements after the shareholders director was transposed into Dutch law. The Central Works Council was invited to speak on this, if you wish, 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 annex 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 4 years is to examine the Management Board remuneration policy and put it before the shareholders' meeting. So here we are 2 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 just dealt with 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 2 free flow cash performance measure, we would have 1 free cash flow for the whole of PostNL rather than 1 for Mail in the other the 1 for Parcels. The second is the impact of the 3 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 2 years, it's been clear that cash flow performance measures at segment level, that is to say 1 for Mail Netherlands and 1 for Packages can lead to undesired results. And for that reason, the Supervisory Board is now putting this new remuneration policy forward, which we have 1 single PostNL cash flow performance merger at PostNL level. The LTI of Post Netherlands hasn't got what we call a stretch opportunity. And that means that when the LTI can go higher than the target level where performance is very good. And 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 spent for the performance of PostNL as a whole. Performance levels at segment level also make it harder at the beginning of the performance period to set realistic targets. The Supervisory Board, therefore, takes the view the performance measures at segment level are inadvisable in the future. Now 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% 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. [ Kirstens ].

Yes, my name is [ Kirsten ] not [ Kirstens ], no S at the end, from the VEB. A very quick question. One of the performance measures is climate impact. And as we see this, it's a CO2 efficiency of operations is the definition. Now we don't fully understand what that means. There's no disclosure and we'd like to know why? And we would be very pleased to hear if it's looked at and assessed after the event, is it also externally audited?

I think this would be a good question for Pim to answer.

The objective is the same as when we showed that the improvement per kilometer of emission. And the objective is certainly to show how the -- how this was realized, Mrs. [indiscernible] explained the assurance concerning nonfinancial 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 Friesland question. What is the difference? What is the difference between the current remuneration system and the future one? And I 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 should 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 some of you. We like to keep things simple. So simple question. Can 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. So 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. And I can explain them in North [indiscernible] person, there is no difference in actual remuneration. So the long-term incentive had been 37.5% of our base salary. And in the future, it will also be 37.5%. So no difference in cash the foundation for achieving it. That's the change, and that's what we're talking about here. But there's no difference in the amount that you can make.

Can I say that in theoretical terms, it 300,000 at the moment and in the future with the proposed new system, how much would it be Mr. Melkert?

. [Foreign Language]

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. Ewout, can we open the vote on this?

Yes.

Okay. I hope this worked. No, not yet. And we're ready.

That takes us to adopting the financial statements for the 2021 financial year. And you'll 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 unqualified 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. Then I would like to open the vote. Please cast your vote and 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 5, dividend. 5A dividend policy. The PostNL dividend policy in keeping with the Dutch corporate governance code that these 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 the dividend is distributed provided that PostNL is financed within the correct financial framework. The objective is to distribute dividends that developed substantially in line with operational performance. A payout ratio of around 70% to 90% of normalized comprehensive income. Shareholders are offered a choice to opt for cash or shares and the interim dividend set at 1/3 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 5b, the profit appropriation. Assuming that you've adopted the financial statements for 2021, we propose a dividend debit 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 a final dividend of 32% per share. And the shareholders have the option of taking a dividend in cash or shares. This proposal also includes the proposal to designate the general meeting -- 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 distribution in shares or cash. The -- we'll read the explanatory notes to the agenda to this meeting, reflecting the technical details and in the press releases published on 8 March 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 to question to all the shareholders are present and also people joining online, please vote against. Now of course, this may be depriving ourselves 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. So we do not want to copy what's happening in Ukraine, and we give them our fullest support. They are struggling. They are fighting autocracy. And 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, 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. So 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. So I would like to continue and put this proposal to the vote, unless there are any other questions or comments.

Looking at this yield on my shares, and that's minus 83%. Whereas, other places, I can get 3,000%. So of course, you always get to bear in mind that you're spreading your risk. And I meant to said that in the light of the current circumstances, this could carry on as it is for a long time, and this would mean to there's going to be higher inflation in the pipeline. So the problem is particularly to be found in the energy field. And if you look at rapid profit, it can be done, but you could have a few thousand members of staff. If you buy collectively, and Mr. Nooitgedagt is very experienced in making a good job of this. Do you buy a Powerwall, a Tesla battery, some solar panels and circular showers and so forth where save lots of energy. And that can all be sold for EUR 10,000. You can give a loan to your staff. They pay up the interest on it, and it's much, much cheaper for them than all the other ways in which you can 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? And it's not very expensive, but your staff don't earn enough in order to [ forecap ] thousands of euros each for their solar panels, et cetera, et cetera. So Mr. Nooitgedagt has a banking background. He's been Chairman of the bank. And Ms. Verhagen, who works at ING Bank, I know that you are both creative in these matters. You can take action here. And if you leave less energy, it's also very good indeed with Mr. Putin because you don't need so much gas. So I'd like to invite you to look together to see how your lower-earning staff can be -- have their lives made more sustainable in this way.

Thank you. We'll take that onboard. I just don't know exactly how.

Yes. I have a request. Yes. I do see our shareholders have lots of other companies. Please have a look, have a look to see at what you are earning and how and support the lower part of society in a creative way. And it might be taking money out of your own wallet, but we're already doing that, aren't we, by supporting Ukraine. And the Prime Minister thinks so too. The Prime Minister Mark Rutte last week also called upon us 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 of the company rather getting after all kinds of shenanigans. The one thing I would like to draw your attention to was something [ Mr. Vreeken ] 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. And 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 will cast your vote, we will move on to the next topic. Item 6 is discharge, granting discharge, release from liability. The General Meeting of Shareholders is requested to release the members of the Board of Management, [Comment off-mic] I just covered that, [Explains the Chairman]. Well, you can keep voting. I'd still like to move on to Item 6, which is the release from liability. The General Meeting of Shareholders is requested to release the members of the Board of Management and the -- of PostNL from liability for their management of the company in the financial year 2021. Before -- and 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 & Parcels (sic) [ Packets & 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 at PostNL, as well as the results of Packets & Parcels, Mail in the Netherlands and CBS, and creating value for our shareholders. Other topics, very important for PostNL that we address regularly include sustainability and digitalization, and we support the Board of Management, supervise and advise as needed there. As stated, 2021 was once again a challenging year. Under the [ ages ] 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. In so far, such management is apparent from the annual report and the financial statements or from information provided to the General Meeting otherwise. And we will now answer any questions there may be about this release from liability. Are there any questions? If not, then may I remind you to cast your vote on the proposal to release the members of the Board of Management at PostNL from liability? [Voting]

Now on to 6B, which is granting a 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. In so far, 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, then 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 3 members. The Supervisory Board determines the actual number of members, which is currently been set at 7 members. In keeping with the schedule of 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 4-year term. There is also vacancy as a consequence of [indiscernible] stepping down at the end of the General Meeting of Shareholders in 2021. As the 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 7d, opportunity for the General Meeting to make recommendations for appointment to the Supervisory Board. The General Meeting may recommend individuals 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. And 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 4-year term and to reappoint me also for a 4-year term. Regarding this last item, I will hand over to Marike 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, 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 4 years. His work at the [indiscernible] has been very, very useful. He has made use of his expertise and knowledge, and we wish to keep him onboard. 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.

I see 2 hands raised. [Foreign Language] Please go ahead.

Thank you, Mr. Chairman. I'm [ Mr. Stevenson ] from the SRB. We would like you to tell us why you are so fascinated with PostNL that you would like to be reappointed.

So your question is to me. 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, I find it exciting to see what's happening on the logistics and how complex the world of mail and parcels is. It really excites me. And over the past 4 years, I've been working -- enjoying working here very much with an excellent team, the Management Board and the Executive Committee, working together with people who I find very stimulating to be with. So yes, I'd be delighted if you want to appoint me for a further 4 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, [indiscernible] was approved by 5%. The next time was the exorbitant salary increase by [indiscernible] a long time about. Why do I object to this one? One of the main reasons, as you just saw, is that I wave my hand a few times and mentioned only on 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.

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 said. 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 are very much in the public eye. You can see over the weekend because we are [ flooded ].

Okay, if there are no further questions, I would invite you to cast your vote on the proposal to reappoint Jan Nooitgedagt for the member of the Supervisory Board. I return the floor to him. [Voting]

Thank you very much, Marike. And now nominating Hannie. The Supervisory Board proposes to appoint Hannie Vlug as a member of the Supervisory Board for a term of 4 years. Hannie's background is management in the public and private sector, and she has strong comm skills and experience in management and supervisory roles. Her expertise and background are 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, and 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 private industry, and 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. And as Director of Working Relations, I was in charge of everything relating to social relations, pension policy, labor migration, all excellent topics. And 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 Parana about all the 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 2 children. I'm looking forward to serving as Supervisory Board member and 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, and 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. And I would certainly like to consider the interest of employees. So 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. Let me see whether there are any questions in the room. Yes. Go ahead, please.

Thank you very much, Mr. Chairman. I'm [ Mr. Stevenson ] from the SRB. We're curious why have you selected, Mrs. Vlug. It says that you conducted a search and looked at backgrounds and different aspects at PostNL. And 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? And did you have a short list that you discussed with a select group. Was part of this group that lead to a limited number of candidates being selected? And how were the interviews?

Well, that was quite a list, wasn't it? But 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. But I don't know whether Hannie knows how many candidates we had, but we had an awful lot of them, and we selected her because of her skills. But you can see it on our website, we've got a matrix of requirements. And we held Hannie up for scrutiny under that matrix, but we are delighted to have her onboard. We investigated thoroughly.

And 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. And 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 section proceedings and how it went. Well, we had a great deal of discussion, as the Chairman said, particularly under the CEO's Chairman, his leadership. And I found those -- all those very, very useful and productive. [indiscernible] was involved, of course, from the Supervisory Board. And that's one question. The second question, could you please repeat the question? Could you please run through your second question again? Not sure I heard you.

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. Formally, in terms, I wouldn'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 I said, I was set as an observer on the Supervisory Board, so I've been able to talk to a lot of people and talk to the Supervisory Board members and the Management Board and the Executive Committee. And above all, I've been finding out about what is going on, particularly look at all the various values which are important. What Pim said to me is it's a good idea to look at this wonderful company through several different lens and glasses, and I think I've 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. And the last point, particularly, I think is where I have been able to build a satisfactory knowledge of this regarding our labor relations from my past, and 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.

To ask a 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 zest 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. And 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 1st of January 2009. I was CEO, dealing with labor relations. That's indeed when the deregulation of the postal market was going through then the Ministry of Economic Affairs and Climate, as now called, was responsible for the actual legislation where I was involved was looking at the labor, the terms and conditions side of things. You have to have a general management tool, had to be established in order to make sure that postal delivery workers would have a proper work contract rather than any kind of a short-term thing and would have to be for at least 80% minimum, 80% of the postal 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. And if you have state-owned companies, such as DPD, there's no leeway. And ultimately, I have to agree, those wages are very low, but a company such as PostNL cannot pay more than what the income allows. It's very, very sad.

[Foreign Language]

Thank you. I'd like to say something else in response to [ Mr. Vreeken ] 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. Agenda Item 7f, 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. Well, now we 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 9th of August 2021, the Supervisory Board intends to reappointing Pim Berendsen as CFO and member of the Board of Management as per 19th of April 2022 for a period of 4 years. His CV and the key elements of the remuneration package, which will not be changed as a result of his renomination, 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 #1 postal and e-commerce logistics supplier all through the Benelux. Pim Berendsen has enabled us to structurally and long-term strength in 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.

I'm [ Stevenson ] 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 4 years.

Well, why do I like it so much? So first question, second question. Well, over the last 4 years, well, I really like working for PostNL, day in, day out, day and night. I think it's a wonderful company. And together with all the teams, we are well on the way to transformation to being the #1 e-commerce and logistics company. There's a lot of work still ahead of us, and I really want to do my bit.

So you were not approached in the past year?

Yes, yes, indeed, but I want to stay with PostNL.

Well, thank you very much, Pim. And I'm speaking in the name of the Supervisory Board. I see there's no point in appointing him because he's behind the screen. There you go. Excellent. Now Item 9, designation of the Board of Management. 9a, designation of the Board of Management and the Supervisory Board to issue ordinary shares. Well, in 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 for ordinary shares as referred to in Article 9 for a period of 18 months from the 20th of April 2021, so as I say, until the 19th of October 2023. The previous designation, which runs until the 20th of October this year, will expire. This is an annual designation, so as 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 would then ask you please to cast your votes. [Voting]

And I will move on to agenda Item 9b, designation of the Board of Management as the 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 the 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, as I say, until the 19th of October 2022. The current authorization, which runs until the 20th of October 2022, will then become null and void. This again is an annual designation. And again, it will be a maximum of 10% of issued capital at the moment of issue. Now we can proceed to any questions that there may be. None? Thank you. In that case, I will ask you once again to cast your vote on this proposal. [Voting]

Now fewer than 50% of shares have been -- are represented for this voting item, 2/3 -- but 2/3 quite is required. So we'll move on to agenda Item 9c, 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 such as on the stock exchange or otherwise for an 18-month period from today's date. That is therefore until the 20th of October 2023. The early authorization, which runs until the 20th of October 2022, becomes null and void. The authorization concerns 10% of the shares, and the ownership will be more than 10% of the current share issue. The purchase can take place at a share price of at least EUR 0.01 and at maximum a share price equal to the quoted ordinary share price, plus 10%. The stock exchange price is to be determined -- the closing price of the PostNL share as set out in the official price journal of the NYSE Euronext Amsterdam N.V. publication in the 5 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%. So 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? [Voting]

And now agenda item 10, proposal to reduce the issued share capital by cancellation of ordinary shares held by PostNL. It is a proposal to -- for any shares which belong to PostNL or acquired by PostNL. Subject to the authorization of the Annual General Meeting of Shareholders of 20th April 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 -- payment of dividend in shares. The number of shares to be withdrawn. Either one of the steps will be determined by the Management Board. The cancellation may take place in one or more tranches, always bearing in mind the deal requirement that such a thing does not happen before 2 months after the decision has been made by the Management Board. Are there any questions? No? Then the vote is open. [Voting]

Now this brings us to the end of today's meeting, but could -- can I now close voting, Ewout?

Yes.

Okay. Ewout says I can. So voting is now closed. We will see the voting results in a moment. But first, I'd just like to say a few words of thanks to our Supervisory Auditor, Ms. Hanneke Overbeek. And also, Ewout de Wit will be 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. All the Supervisory Board and the Management Board would like to thank you for your work, and 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, and [indiscernible] who will be supervising auditor. And of course, we wish him everything else. 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 go.

Did I hear anyone say any other business? Yes. [indiscernible], we haven't actually gotten any points without any other business.

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% present in favor; agenda item 4, adoption of the 2021 financial statements, 99.99% 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? Yes, there it is. Agenda item 6a, release from liability the members of the Board of Management, 99.99% of votes in favor; same [ results ] agenda item 6b, release from liability of the Supervisory Board; agenda item 7d, proposal to appoint Jan Nooitgedagt as member of the Supervisory Board, votes in favor, 99.53%, so he's duly reappointed; agenda item 7e, proposal to appoint Hannie Vlug, 99.99% of votes in favor. So that is also approved. And now the last screen, agenda item 9a, 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, and I don't understand why that wasn't available here. And I spoke with people who came from the north of the country who were driving over here for 3 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. But this method now is not to be repeated.

Thank you very much. Any further comments? Yes?

I Googled the messages, and I checked the PostNL website, and I saw that we were not expected to arrive here before half past 1. Well, I registered with the bank in ordinarily. I received a message about how to get their directions, and I made it here through Google Maps. And 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, and I hear this gentleman saying that if you -- you used to treat us differently when you had made losses. Now you've earned such profits, but you're -- I don't think that you're chairing the meeting well. 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 to be briefer in the meeting, and 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. Shingkles ]. 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, but you said a few times that you can take this decision at 25% share ownership. But 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, and perhaps you could say a bit more about this because it's extraordinary for a foreign operator or investor to accumulate immense interest in PostNL. 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. And now the share price that I just heard from Mr. Van den Bos, EUR 3.40. But 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 being shared 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.

Ewout?

Well, yes, Mr. Daniel Kretínský'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. Questions in English. Well, the documentation is in English because of all our foreign investors who are looking from outside 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. So that's an advantage for you, isn't it?

But interest of 25%, and the Chairman says 3 times in the meeting that to approve the proposals, we have to have 75% or more of the vote in favor. Well, you must have been in touch with this major shareholder because you're making proposals. And you're saying it's visible about the 25%. Are you 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. And Mr. Van den Bos said that dividend is also ridiculous that it's 12% of the share price. It's a loose cannon. But in interest of 25% and the Chairman says 3 times in the meeting that to approve the proposals. We have to have 75% or more of the vote in favor. Well, you must have been in touch with this major shareholder because you're making proposals. And you're saying it's visible about the 25%. Are you 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 in holds over 25%. It's incomprehensible for me. And Mr. Van den Bos said that dividend is also ridiculous that is 12% of the share price. It's a lose canon.

Yes. The Shareholder -- the shares are held by one of Mr. Kretínský's businesses, and that's important. It's the company that owns the shares. And 100% of PostNL shares are freely available on the stock exchange. That's to say that anyone can buy the shares, irrespective of where they're based once the offer is made, and that's what they did. And 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 2 or 3, 4 times a year. We do so after publishing the quarterly figures, and 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. And 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 or something is wrong. You need to publish far more forcefully and far more clearly because who's going to -- 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, and they should trade in sustainable future shares. It's obvious that everybody wants to be sustainable. I nonetheless like to respond to your Investor Relations department. It has not been conveyed forcefully enough. Which parties sold? Which parties left?

This makes sense, and I didn't envisage this. But on 8 November, this investor held only 20%, but that's 25% now. And I wonder whether this serves the interests of the Dutch states. So perhaps the state previously are [indiscernible] whether it might want to acquire more shares in PostNL because a check, if it holds 30%, he'll be expected to make an offer for all the shares. And I don't think that's desirable for PostNL, which is crucial like water and gas, but then mail and parcels. So 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 Jack Republic.

Yes. I think what they previously was saying about who we're saying goodbye to and the question of [ Mr. Vreeken ], 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 development. What is important, I think, is that Investor Relations are constantly in dialogue and constantly seeking dialogue with shareholders in order to keep the equity story and the strategy. No, no, we don't need to do that for shareholders nor 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 peer's share price performance. So I think that, that is another thing you have to bear in mind when considering the trends you mentioned a moment ago. Now's there's a number of players and they've been shareholders of us for years now, and they make choices regarding their investment policy. They decide to join us or to leave us, and the composition of our shareholder base is something we keep tabs on as closely as we can. And there are potentially new shareholders and former shareholders and current shareholders, and Investor Relations is in constant dialogue with them, particularly because we want to tell them PostNL's story, the equity story and the strategy. We want to explain that as fully as we can.

Yes. Mr. Chairman, I understand this, but you say that we have a return of 37%, but the share price was being bulldozed -- we're talking about EUR 288 million now at a share price of -- lower -- we were at -- we had a disastrous rate of less than EUR 1 for this year. It's almost become a penny stock, and it's easy to do the math. And many investors did something differently. That kept me awake at night, too. It was a disaster for me. And okay, it increased to EUR 5, but I think it's impossible to understand. Investors are in it for the long haul, and they purchased it when it costs EUR 1, and they -- then they'll go for a 37% return. You're not very convincing that the share price was on a collision course. You're not convincing at all. Something must really be wrong. And I read that this major shareholder also holds a large share in a company in England as far as I know.

Well, as I said earlier, we are in constant talks with this shareholder. And also any other interested shareholders, we get in touch with them every time we have our 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.

Well, I'm glad we did this 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. And 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 ask the bank. It's impossible to find out what's happening. What -- 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. And my most recent information was that they had about 23% -- 27%, but I do know that they increased their holding in British [ mill ] to about 12%. But we're dealing with an awful lot of parties that sell without actually owning the shares. Well, you can think of the obvious, and you can think of many other things. [ Mr. Shingkles ] [Excuse me, Sinkles says the speaker], anything is possible, and a Supervisory Board can't influence that. Sometimes I think that what's happening is very strange. And quite honestly, I 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. [Remark, off-mic, inaudible. interpreter apologizes]. 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. And also your compliments, it's not always we get those. Thank you very much, and thank you also for tolerating the fact you are going home on an empty stomach. But perhaps you will take comfort from the fact that we're going here with empty stomachs, too. Thank you all very much.