Highlights Q3
Underlying revenues up 1.2% to €1,003 million
Underlying cash operating income €4 million
Performance Mail in the Netherlands impacted by high volume decline of 10.1%
Pilots and review of alternatives for restructuring in the Netherlands
Continued good performances Parcels and International
Fair value adjustment stake TNT Express €180 million
Net debt increased by €214 million versus year-end 2011 to €1,216 million

Key figures Q3 & YTD Q3 2012
in € millions, except where noted Q3 2012 Q3 2011 % Change YTD Q3 2012 YTD Q3 2011 % Change
Revenues 1,022 9 91 3.1% 3,129 3,127 0.1%
Operating income (128) 6 6 -293.9% 72 284 -74.6%
Operating margin -12.5% 6.7% 2.3% 9.1%
Underlying revenues 1,003 9 91 1.2% 3,086 3,127 -1.3%
Underlying operating income 60 7 0 -14.3% 280 279 0.4%
Underlying operating margin 6.0% 7.1% 9.1% 8.9%
Underlying cash operating income 4 2 1 -81.0% 6 3 1 21 -47.9%
Underlying cash operating margin 0.4% 2.1% 2.0% 3.9%
Reversal of/(Impairment) of investments in associates - ( 337) 5 70 ( 734)
Profit from continuing operations (161) ( 313) 5 23 ( 584)
Profit from discontinued operations - - - 2,159
Profit for the period (161) ( 313) 48.6% 5 23 1,575 -66.8%
Profit for the period (excluding TNT Express) 19 2 7 -29.6% 1 35 1 50 -10.0%
Net cash from operating activities (62) (75) ( 117) (6)

CEO statement
Herna Verhagen, CEO of PostNL, states: "In Q3, underlying cash operating income decreased from €21 million to €4 million, mainly as a result of the decline in addressed mail volumes.

Parcels saw good volume growth. The integration of Trans-o-flex progresses according to plan. With six new depots now operational, the New Logistics Infrastructure programme is on track and fully up to speed.

Despite the challenging competitive and economic environment, International showed volume growth everywhere. Overall the results improved against the previous year.

Following the slow start of the year, in this quarter the performance in Mail in the Netherlands remained under pressure. The third quarter was marked by a decline of addressed mail volumes of 10.1%, mainly due to substitution. After the temporary stop of the roll-out of the new infrastructure in Mail in the Netherlands in April, improvement initiatives have been implemented resulting in an enhancement of quality levels, which are now almost back to standard. One of the main pilots, that starts today, is a test in which three locations will be integrated. This test will show the potential for cost reduction against a lower risk profile because business process changes will be less disruptive. After review of all alternatives, we will take a decision with respect to the further roll-out of the reorganisation on which we will give an update at the latest with our Q4 results. We remain confident we will reach our long term savings targets. We expect a positive final decision by Parliament on the proposal to drop the Monday delivery requirement before the end of the year.

Looking at the remainder of the year, we expect the addressed mail volume decline to be between 8% and 10% for 2012. We reaffirm our underlying cash operating income outlook for the year, although we expect that the full year result will be at the bottom half of the range. The outlook remains sensitive to further developments in the roll-out of Master plans and the sale of real estate."

Consolidated equity
Total equity attributable to equity holders of the parent decreased to €925 million on 29 September 2012 from €1,079 million as per 30 June 2012. This decrease is mainly due to the fair value adjustment of the stake in TNT Express N.V.
The impact of the implementation of the revised IAS 19 (implementation date 1 January 2013) on the 2013 financialposition and income statement will be significant. As at 29 September 2012, the net pension asset amounted to €1,152 million. This includes net actuarial losses for an amount of around €2,100 million. If these net actuarial losses asper Q3 2012 had been recognised immediately, this would have impacted equity of PostNL negatively by a net amountof €1,580 million. These amounts are based on current parameters which are heavily dependent on interest rate
movements.

Summary outlook 2012
On the basis of our Q3 results, we expect the addressed mail volume decline to be between 8% and 10% for 2012.
Underlying revenues for International are expected to show mid single digit growth, and the underlying cash operatingmargin of Mail in the Netherlands is expected to be between 0 and 2%. We expect total revenues to be in line with 2011.
We reaffirm our outlook for underlying cash operating income of €110 million – 160 million, although we expect theresult to be at the bottom half of the range because of the delay in the reorganisation impacting Master plan savings andimplementation costs. Also we expect lower proceeds from the sale of real estate because of this delay and the overall weak real estate market in the Netherlands.
The outlook remains sensitive to further developments in the roll-out of Master plans and the sale of real estate.

Shareholding in TNT Express
On 19 March 2012, United Parcel Service (UPS) and TNT Express announced their agreement on a recommended public offer of €9.50 per ordinary share to be made by UPS for TNT Express. PostNL has signed an irrevocable undertaking with UPS to tender all TNT Express shares held by it under the offer of UPS subject to customary undertakings and conditions.
Over Q1 2012, PostNL’s share in net earnings and direct equity movements of TNT Express was included in the consolidated income statement using the equity method taking into account additional depreciation and amortisation (‘purchase price adjustments’). The total impact of the purchase price adjustments amounted to €4 million. The share price of TNT Express increased from €5.77 as per 30 December 2011 to €9.26 as per 30 March 2012 resulting in a reversal of the impairment charge over 2011 of €570 million.
As a result of the UPS offer and PostNL’s irrevocable undertaking, at the end of Q1 2012 the stake in TNT Express was transferred from investments in associates to assets held for sale. IFRS 5 ‘Assets held for sale’ requires assets to be valued at the lower of their fair value less cost to sell and their carrying value. In Q2 2012 the share price of TNT Express decreased to €9.24 as per 29 June 2012 resulting in an adjustment of €4 million. In Q3 2012 the share price of TNT Express further declined to €8.13 as per 28 September 2012 resulting in an additional adjustment of €180 million decreasing the value of the stake in TNT Express to its market value of €1,318 million
as per 29 September 2012.
On 20 July 2012, the European Commission announced that the review of the proposed acquisition of TNT Express by UPS has moved to a Phase II review, as there are certain areas that require more time to analyse. On 31 October, the offer period has been extended until one week after clearances from the European Commission and the Chinese Ministry of Commerce, but under no circumstances later than 28 February 2013. UPS and TNTExpress indicated that they expect the deal to complete in early 2013.

Auditor’s involvement
The content of this interim financial report has not been audited or reviewed by an external auditor.

About PostNL
PostNL processes 8.7 billion addressed postal items (including 106 million parcels) each year and delivers to addresses in the Benelux, Germany, the UK and Italy. PostNL’s main business is mail, parcels and e-commerce. The company also provides services in the area of data and document management, direct marketing and fulfilment. PostNL employs some 65,500 people. In 2011 the company generated a turnover of nearly 4.3 billion euros.