Posti Group Corporation - Interim report (Q1 and Q3)

Posti Group Corporation: Posti Group's net sales in Q1 2017 grew by 7% mainly driven by acquisitions - operating result improved

POSTI GROUP CORPORATION INTERIM REPORT, APRIL 28, 2017 AT 10:00 A.M. (EET)



Posti Group Corporation Interim Report Q1/2017

Financial highlights

  * The Group's net sales increased by 7.2% to EUR 413.8 (386.1) million.
  * The Group's adjusted EBITDA improved and was EUR 35.5 (29.8) million, 8.6%
    (7.7%).
  * The Group's EBITDA improved to EUR 30.0 (21.2) million, 7.3% (5.5%).
  * The adjusted operating result increased to EUR 15.5 (10.8) million, or 3.8%
    (2.8%) of net sales.
  * The operating result improved and amounted to EUR 10.0 (0.6) million, or
    2.4% (0.1%) of net sales.



Operational highlights

  * Measured in waybills, Posti's domestic freight grew by 11%. Parcel volumes
    in Finland and in the Baltic countries grew by 8%. The number of addressed
    letters decreased in Finland by 8%.
  * On January 10, 2017, Posti acquired HR Hoiva Oy (currently Posti
    Kotipalvelut Oy), which produces home care and personal assistance services
    for municipalities, joint municipal authorities and private customers.
  * Posti started building a freight terminal of approximately 26,000 m(2) on
    Suokalliontie in Vantaa. The construction of the terminal is a response to
    the growth of the freight business.
  * Mail items covered by the universal service obligation accounted for 4.5%
    (5.6%) of all of Posti's mail items.
  * The number of working days was 64 (61).
  * In line with the Board of Directors' proposal, the Annual General Meeting
    decided on March 27, 2017 that a dividend of 69% of the Group's adjusted net
    profit, EUR 25 million be distributed. In addition to that, the Annual
    General Meeting decided in line with the Board of Directors' proposal that
    an extra dividend of EUR 35 million be distributed. Dividend distribution is
    altogether EUR 60 million. Markku Pohjola, M.Sc. (Econ. & Bus. Adm.) was
    elected as the new Chairman of the Board of Directors and Eero Hautaniemi as
    the new Member of the Board of Directors.



Outlook

  * Net sales in euros for the year are further expected to increase compared to
    the previous year. The Group's adjusted operating result is further expected
    to remain on par with the previous year. The operating result for 2017 will
    include significant special items.

Figures in brackets refer to the comparison period, i.e. the same period last
year, unless otherwise stated.


Key figures of Posti Group

                                          1-3/2017 1-3/2016 1-12/2016
---------------------------------------------------------------------
Net sales, EUR million                       413.8    386.1   1,607.6

Adjusted EBITDA, EUR million                  35.5     29.8     126.7

Adjusted EBITDA, %                             8.6      7.7       7.9

EBITDA, EUR million                           30.0     21.2     116.0

EBITDA, %                                      7.3      5.5       7.2

Adjusted operating result, EUR million        15.5     10.8      47.1

Adjusted operating result, %                   3.8      2.8       2.9

Operating result, EUR million                 10.0      0.6      30.7

Operating result, %                            2.4      0.1       1.9

Result before taxes, EUR million               9.7     -0.6      29.5

Result for the period, EUR million             5.9      0.1      23.2

Cash flow from operating activities            3.5     29.1      63.1

Return on equity (12 months), %                5.1      3.9       3.9

Return on invested capital (12 months), %      6.4      4.3       5.1

Equity ratio, %                               50.1     45.4      54.9

Gearing, %                                   -11.7    -15.4     -13.6

Gross capital expenditure, EUR million        24.4     11.4     100.4

Employees on average                        19,986   20,577    20,632

Employees on average, FTE                   18,058   18,542    18,529

Dividends, EUR million                                           60.0






Heikki Malinen, President and CEO
"The ongoing trend of digitization in the business environment remains strong
and reflects directly on Posti, with the Group undergoing a multi-year
structural transformation as communication shifts from paper to digital.
However, the digitization is not only a threat, as it also offers Posti new
business opportunities. Posti continues to build new cornerstones for its
business in growing markets according to its strategy: the areas of future
growth are in parcel and logistics services. The decline in mail volumes
continued strongly and was 8%.

Net sales increased by 7.2% in the first quarter of the year. While letter
product volumes continued to fall, the volumes of logistics and freight products
showed favorable development in line with the improving economic climate.
Logistics Services grew by 34.4% and Parcel Services by 4.2%. Net sales was
impacted by currency rates and the larger amount of working days in the period.
Furthermore, a significant proportion of the year-on-year growth is related to
the Group's expansion through acquisitions. Digitization and the market entry of
new players have had a substantial effect on the volumes of basic products, but
targeted pricing changes have mitigated the financial impacts of declining mail
volumes. Posti has also developed new and prominent service concepts in the area
of home services, but their share of net sales remains low for the time being.
Parcel point concepts have been developed further.

Posti's adjusted EBITDA in the first quarter was 8.6% (7.7%). The higher
profitability was particularly attributable to the improved results in logistics
and Russian operations. The year-on-year improvement in the result was partly
due to Easter falling in April this year, which affects the distribution of the
result between the first and second quarter. The improved profitability of
logistics services was supported by a general increase in demand as well as
improved operational efficiency. Posti has continued to implement measures to
improve the quality of basic services.

The reform of the Postal Act, which is still in the drafting stage, plays a key
role with regard to Posti's future operating conditions.

Itella Russia's net sales in the Group's reporting currency increased by 31%.
The measures taken to improve the profitability of Itella Russia's operations
have produced good results.

OpusCapita's Buyer-Supplier Ecosystem business unit continued to achieve global
growth, but OpusCapita's Document and Transaction Processes operations are
negatively affected by the same trends that are influencing Posti's letter
volumes. OpusCapita's strategy is to seek growth in the Buyer-Supplier Ecosystem
business."





APPENDICES
Posti Group's Interim Report in full (PDF)
FURTHER INFORMATION
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)

FINANCIAL CALENDAR IN 2017
Interim Report Q2/2017: July 27, 2017, at 12:00
Interim Report Q3/2017: October 26, 2017, at 9:00


DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.posti.com/financials


IMAGES AND LOGOS
www.posti.com/newsroom



Posti Group is your first choice in postal, logistics and e-commerce services.
We manage the flow of commerce and everyday life in ten countries. Our net sales
in 2016 amounted to EUR 1,608 million. We employ approximately 20,500
professionals who serve our customers in Finland under the name Posti and in
other countries under the name Itella. All of our services in Finland are carbon
neutral. www.posti.com.







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Attachments:

Posti-Group-Interim-Report-Q1-2017.pdf