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PostNL’s financial framework is based on:

• steering business performance by using value-based performance measures,
• strict cash flow management, and
• an efficient and strong capital structure, with a long-term investment grade credit rating target of BBB+ / Baa1.

The financial strategy provides adequate financial flexibility. This is necessary to support strategic growth platforms, the restructuring of the Dutch mail business and to combat a degree of business or economic headwind.

The key components of PostNL’s financing strategy mentioned above relate directly to:

• effective risk management, internal control, and compliance,
• financial risk management and insurance,
• aligned legal and funding structures, and
• working capital management

Capital Structure & Credit Rating

The current capital structure is based on and managed with regard to the following components:

• targeting an investment grade credit rating of BBB+ / Baa1,
• structural availability of €400 – €500 million of undrawn committed facilities out of our €570 million revolving credit facility,
• structural funding via a combination of public and bank debt, with a risk-weighted mix of fixed and floating interest,
• cash pooling systems that ensure optimised cash requirements for the Group by facilitating centralised funding and surplus cash concentration at group level, and
• tax-optimal internal and external funding focused on optimising the cost of capital for the Group, within boundaries that are sustainable on a long-term basis.

PostNL’s current credit ratings are BBB- 'Outlook Negative' from Standard & Poor’s (S&P) and Baa3 'Negative' from Moody’s.

PostNL manages its financial risk profile along a cash flow to debt ratio and a debt to EBITDA ratio.

An important factor in re-establishing PostNL's targeted BBB+ / Baa1 credit rating will be a reduction of the outstanding debt, using part of the proceeds from a gradual sale of the 29.8% shareholding in TNT Express, thereby improving the financial ratios.

PostNL expects its financial ratios to be in line with a BBB+ / Baa1 in 2016.