2017-02-28 11:00:46 CET
2017-02-28 11:00:46 CET
REGLAMENTUOJAMA INFORMACIJA
Posti Group Corporation - Annual Financial Report
Posti Group Corporation: Posti Group's net sales Q4 2016 grew by over 5 % - EUR 60 million dividend to the state
POSTI GROUP CORPORATION'S FINANCIAL STATEMENTS RELEASE, FEBRUARY 28, 2017 AT
12:00 (EET)
Posti Group Corporation's Financial Statements Release 2016
October-December 2016
Financial highlights
* The Group's net sales increased by 5.4% to EUR 456.5 (433.2) million.
* The Group's adjusted EBITDA declined and was EUR 43.0 (43.2) million, 9.4%
(10.0%).
* The Group's EBITDA improved to EUR 38.6 (30.6) million, 8.4% (7.1%).
* The adjusted operating result declined to EUR 22.7 (24.0) million, or 5.0%
(5.5%) of net sales.
* The operating result improved and amounted to EUR 14.2 (8.3) million, or
3.1% (1.9%) of net sales.
Operational highlights
* The number of addressed letters decreased by 6%. Measured in waybills,
domestic freight grew by 10% excluding the effect of acquisitions and
divestments. Parcel volumes grew by 9% in Finland and by 21% in the Baltic
countries. B2C parcels grew by 13%.
* In October, Posti acquired Kuljetus Kovalainen, a company that specializes
in food product transport. The acquisition supports Posti's strategy of
continued growth in food logistics and temperature-controlled transport.
* Mail items covered by the universal service obligation accounted for 9% of
all of Posti's mail items. Figure is seasonally higher in the last quarter
due to Christmas cards. A total of approximately 28 (30) million Christmas
cards were sent in 2016.
* The number of working days was 63 (64).
Year 2016
Financial highlights
* The Group's net sales decreased by 2.5% and amounted to EUR 1,607.6
(1,649.1) million.
* The Group's adjusted EBITDA was EUR 126.7 (128.2) million, 7.9% (7.8%).
* The Group's EBITDA declined to EUR 116.0 (147.2) million, 7.2% (8.9%).
* The adjusted operating result was EUR 47.1 (47.6) million, or 2.9% (2.9%) of
net sales.
* The operating result declined to EUR 30.7 (54.8) million, or 1.9% (3.3%) of
net sales. Special items were EUR 10.6 (40.8) million.
* Cross capital expenditure totaled EUR 100.4 (66.8) million.
* The return on invested capital was 5.1% (6.4%).
* The equity ratio was 54.9% (46.9%).
* Gearing was -13.6% (-10.9%).
* The Board of Directors proposes to the Annual General Meeting that a
dividend of 69% of the Group's adjusted net profit, EUR 25 million be
distributed. In addition to that, the Board of Directors proposes that an
extra dividend of EUR 35 million be distributed, both altogether EUR 60
million.
Operational highlights
* The number of addressed letters decreased by 7%. Measured in waybills,
domestic freight grew by 7% excluding the effect of acquisitions and
divestments. Parcel volumes grew by 3% in Finland and by 26% in the Baltic
countries. B2C parcels grew by 7%.
* OpusCapita sold its businesses serving the local markets in the Baltic
countries to BaltCap in January.
* Itella Russia acquired the Russian courier company MaxiPost in March.
* OpusCapita acquired the Germany-based software company jCatalog Software in
April. The acquisition supports OpusCapita's strategy to build a global
buyer-supplier ecosystem offering and expands its geographical reach.
* Posti acquired Veine, a company that specializes in temperature-regulated
logistics, in August. The acquisition supports Posti's strategy to grow in
food logistics. Together, Posti and Veine can offer competitive and
nationwide food logistics solutions.
* In September, Posti Kiinteistöt sold a 74,000 square meter logistics
warehouse property, Pennala, located in Orimattila.
* By the parliament's decision in June, the Finnish State can decrease its
ownership in Posti Group Corporation. In accordance with Government
Resolution on Ownership Steering Policy, 49.9% of the ownership of Posti
Group Corporation will be transferred to a new state-owned development
company, Vake Oy, which was established in August. The Finnish State's
direct holding will remain at 50.1%.
* Mail items covered by the universal service obligation accounted for 6% of
all of Posti's mail items in 2016.
* The number of working days was 253 (252).
Changes in reporting and revenue recognition principles
The Postal Services operating segment and the Parcel and Logistics Services
operating segment have been aggregated into a single reportable segment called
Mail, Parcel and Logistics Services. Starting from the last quarter of 2016, the
company reports the results of its operations for the following reportable
segments: Mail, Parcel and Logistics Services; Itella Russia; and OpusCapita. In
addition, the company will report net sales for the following business areas
under the Mail, Parcel and Logistics Services segment: mail and marketing
services, parcel services, press services and logistics services.
Going forward, Posti will also report new financial indicators: EBITDA and
adjusted EBITDA.
Posti has changed the Group's revenue recognition principle for stamps and other
prepaid services. Under the new revenue recognition principle, the Group will
recognize revenue for prepaid services, such as stamps, franking machines and
prepaid envelopes, based on their estimated usage. Previously, revenue from
these prepaid services has been recognized at the point of customer purchase.
The estimated usage is based on a certain statistical model that incorporates
historical sales and usage volumes as well as price changes.
Posti published a stock exchange release 'Change in reportable segments and the
revenue recognition principle for stamps' on January 24, 2017 where it said:
"Posti excludes the impact of acquisitions and divestments so that net sales of
acquired or divested businesses is not taken into account in calculating the
comparable net sales. The net sales of divested businesses is excluded also from
the figures of the comparative period." Departing from the statement, Posti will
not disclose comparable net sales as of the last quarter of 2016. This means
that the net sales of acquired or divested businesses is included in the net
sales.
Posti changed its terminology for Alternative Performance Measures in accordance
with the new guidelines issued by the European Securities and Markets Authority
(ESMA) as of the interim report for the second quarter of 2016. "Non-recurring
items" was replaced by "special items". "Operating result before non-recurring
items" was replaced by "adjusted operating result". The definitions for these
performance measures and for items affecting the comparability of reported
figures are provided in the section "Calculation of key figures" of this
financial statements release and at www.posti.com/financials.
Figures in brackets refer to the comparison period, i.e. the same period last
year, unless otherwise stated.
+--------------------+----------+------------------+---------+-----------------+
|Key figures of Posti| | restated**| | restated**|
|Group |10-12/2016| 10-12/2015|1-12/2016| 1-12/2015|
+--------------------+----------+------------------+---------+-----------------+
|Net sales, EUR | | | | |
|million | 456.5| 433.2| 1,607.6| 1,649.1|
+--------------------+----------+------------------+---------+-----------------+
|Adjusted EBITDA, EUR| | | | |
|million | 43.0| 43.2| 126.7| 128.2|
+--------------------+----------+------------------+---------+-----------------+
|Adjusted EBITDA, % | 9.4| 10.0| 7.9| 7.8|
+--------------------+----------+------------------+---------+-----------------+
|EBITDA, EUR million | 38.6| 30.6| 116.0| 147.2|
+--------------------+----------+------------------+---------+-----------------+
|EBITDA, % | 8.4| 7.1| 7.2| 8.9|
+--------------------+----------+------------------+---------+-----------------+
|Adjusted operating | | | | |
|result, EUR million | 22.7| 24.0| 47.1| 47.6|
+--------------------+----------+------------------+---------+-----------------+
|Adjusted operating | | | | |
|result, % | 5.0| 5.5| 2.9| 2.9|
+--------------------+----------+------------------+---------+-----------------+
|Operating result, | | | | |
|EUR million | 14.2| 8.3| 30.7| 54.8|
+--------------------+----------+------------------+---------+-----------------+
|Operating result, % | 3.1| 1.9| 1.9| 3.3|
+--------------------+----------+------------------+---------+-----------------+
|Result before taxes,| | | | |
|EUR million | 14.7| 4.7| 29.5| 42.3|
+--------------------+----------+------------------+---------+-----------------+
|Result for the | | | | |
|period, EUR million | 10.4| 3.1| 23.2| 35.1|
+--------------------+----------+------------------+---------+-----------------+
|Cash flow from | | | | |
|operating activities| | | 63.1| 81.9|
+--------------------+----------+------------------+---------+-----------------+
|Return on equity (12| | | | |
|months), % | | | 3.9| 6.2|
+--------------------+----------+------------------+---------+-----------------+
|Return on invested | | | | |
|capital (12 months),| | | | |
|% | | | 5.1| 6.4|
+--------------------+----------+------------------+---------+-----------------+
|Equity ratio, % | | | 54.9| 46.9|
+--------------------+----------+------------------+---------+-----------------+
|Gearing, % | | | -13.6| -10.9|
+--------------------+----------+------------------+---------+-----------------+
|Gross capital | | | | |
|expenditure, EUR | | | | |
|million | 23.3| 17.1| 100.4| 66.8|
+--------------------+----------+------------------+---------+-----------------+
|Average number of | | | | |
|employees | | | 20,632| 22,219|
+--------------------+----------+------------------+---------+-----------------+
|Dividend, EUR | | | | |
|million | | | 60.0* | 18.0|
+--------------------+----------+------------------+---------+-----------------+
*) Board of Directors' proposal to the Annual General Meeting
**) Restated due to change in the revenue recognition principle
Heikki Malinen, President and CEO:
During the past five years, Posti has gone through the most radical period of
transformation in its entire history. Digitization has drastically reduced
traditional communication while, at the same time, the Finnish economy and the
entire logistics industry have been in a recession. It was another challenging
year for the Group in 2016 but, particularly in the last quarter, there were
already signs of a turn for the better.
The Group's net sales turned to an increase of more than 5% in the final quarter
of the year. Particularly gratifying was the substantial growth achieved in
parcel services, where B2C volume increased by almost 13%, boosted by e-
commerce, and cross-border parcel services volume grew by more than 7%. The net
sales of parcel services grew by nearly 6% in the fourth quarter. We also saw
growth in our logistics services. Organic growth was nearly 8% and the overall
net sales of logistics services grew by 29% in the fourth quarter.
Posti's profitability in 2016 remained good in spite of the difficult market
situation. Adjusted EBITDA even improved in the Mail, Parcel and Logistics
Services segment. The Group's adjusted EBITDA, EUR 126.7 million, was on par
with the previous year. We are very pleased that Itella Russia finished a
difficult year with a better result than previous year. OpusCapita also improved
its profitability in the last quarter of the year.
Our operating cash flow from operating activities was good at EUR 63.1 million.
The consolidated balance sheet remains strong in spite of the repayment of a EUR
150 million bond late in the year. Due to the strong balance sheet, the Board of
Directors proposes the payment of a significant extra dividend.
Although Posti is Finland's leading company in the postal and logistics
industry, company will continue its resolute renewal to adjust to the rapid
trend of digitization in society. Digitization is inevitable, with addressed
letter volumes falling by another 7% in 2016. For this reason, renewal and
growth are the main focus of our strategy, which was updated last year. In spite
of the decline in volume, postal services will remain a central area of our
operations. Postal services are very significant to Posti's profitability and we
believe that the upcoming reform of the Postal Act will help extend the life
cycle of traditional communication.
Parcel and logistics services represent the engine of Posti's future growth. We
provide the most extensive nationwide logistics and retail network as well as a
comprehensive supply chain. Last year, Posti acquired Veine and Kuljetus
Kovalainen, two transport companies that specialize in temperature-controlled
logistics, to support our pursuit of new growth in food logistics. It is also
very significant that Posti is now part of DHL's European parcel alliance, which
improves our competitiveness in international e-commerce and parcel delivery.
Higher e-commerce volumes have already had a visible positive effect on domestic
warehousing services as well as the increase in the net sales of Itella Russia's
MaxiPost.
I want to thank Posti's employees for their important work in 2016 to ensure a
smoother everyday life for our customers. The implementation of renewal measures
in delivery operations last fall resulted in some regrettable disruptions. We
are sorry for the inconvenience caused by the disruptions and, after working
hard to rectify the situation in early 2017, we have restored our delivery
quality to a very good level at above 99%. I wish to thank our customers for
their trust.
APPENDICES
Posti Group's Financial Statements Release in full (PDF)
FURTHER INFORMATION
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)
FINANCIAL CALENDAR IN 2017
Financial Statements Release for 2016: February 28, 2017, at 12:00
Financial Statements for 2016: March 8, 2017, at 9:00
Interim Report Q1/2017: April 28, 2017, at 9:00
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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