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2011-10-26 09:00:00 CEST 2011-10-26 09:00:06 CEST REGULATED INFORMATION Itella Oyj - Interim report (Q1 and Q3)Itella Interim Report for January-September 2011ITELLA CORPORATION STOCK EXCHANGE RELEASE October 26, 2011, AT 10:00 A.M. July-September 2011 -- Itella Group's net sales grew by 5% in July-September and totaled EUR 449.4 million (EUR 428.1 million in July-September 2010). -- Net sales increased in all business groups. -- The Group recorded an operating loss of EUR 21.5 million (operating profit of EUR 4.4 million), representing -4.8% (1.0%) of net sales. The operating result was weighed down by non-recurring expenses amounting to EUR 32.3 million (EUR 1.6 million), of which restructuring costs expenses related to the cost-cutting program initiated by the Group in August accounted for EUR 15.7 million and goodwill impairment for EUR 16.6 million. -- Itella Group's operating result, excluding non-recurring items, grew from the previous year and totaled EUR 10.7 million (EUR 6.0 million). -- The operating result excluding non-recurring items of Itella Mail Communications fell to EUR 7.4 million (EUR 9.7 million) and of Itella Information to EUR 0.1 million (EUR 3.1 million). Itella Logistics' operating result excluding non-recurring items turned profitable, and amounted to EUR 3.7 million (EUR -3.0 million). -- Due to the downturn in performance trends Itella introduced a three-year EUR 100 million cost-cutting program in August. -- On August 31, 2011, Itella's subsidiary Itella Bank Ltd was granted a deposit bank authorization pursuant to the Credit Institutions Act. January-September 2011 -- Itella Group recorded net sales of EUR 1,382.0 million in January-September (EUR 1,332.7 million in January-September 2010). International operations accounted for 33% (32%) of net sales. -- The Group operating loss was of EUR 25.0 million (operating profit of EUR 16.5 million), representing -1.8% (1.2%) of net sales. -- The operating loss includes non-recurring expenses of EUR 32.6 million (EUR 15.5 million). -- Itella Mail Communications net sales remained stable, while profitability clearly declined. -- Itella Information's net sales increased slightly, but profitability declined. -- Itella Logistics clearly increased its net sales but operating result remained negative. Operating loss excluding non-recurring items, however, decreased compared to the previous year. -- The Finnish Parliament approved the new Postal Act, which entered into force on June 1, 2011. Itella's subsidiary Itella Posti Oy has the license for universal service. Itella key figures 1-9 1-9 2010 2011 2010 ------------------------------------------------------------------- Net sales, EUR million 1,382.0 1,332.7 1,841.6 ------------------------------------------------------------------- Operating result (EBIT), EUR million -25.0 16.5 38.1 ------------------------------------------------------------------- Operating result (EBIT) percentage -1.8 1.2 2.1 ------------------------------------------------------------------- Operating result (EBIT), EUR million*) 7.6 31.9 55.4 ------------------------------------------------------------------- Operating result (EBIT) percentage*) 0.6 2.4 3.0 ------------------------------------------------------------------- Result before income tax, EUR million**) -32.4 14.0 31.0 ------------------------------------------------------------------- Return on equity, %, 12 months -4.4 1.2 1.4 ------------------------------------------------------------------- Return on investment, %, 12 months -0.6 5.1 4.2 ------------------------------------------------------------------- Equity ratio, % 47.3 49.7 50.5 ------------------------------------------------------------------- Gearing, % 31.0 26.0 18.4 ------------------------------------------------------------------- Gross investments, EUR million 66.9 64.0 81.9 ------------------------------------------------------------------- Personnel on average 28,711 29,009 28,916 ------------------------------------------------------------------- Dividend, EUR million 4.4 ------------------------------------------------------------------- *) Excluding non-recurring items **) Continuing operations Jukka Alho, President and CEO: ”The concrete steps aiming to adapt Itella's operations to the changes affecting its business environment began in the early autumn. August saw us announcing the need to boost our efficiency with EUR 100 million. In relation to this, we commenced personnel adaptation measures concerning a total of more than 900 man-years. The purpose of the increase in efficiency is to ensure that we will continue to maintain an adequate level of service nationally. The realization of these plans has run parallel to the increasingly strong signs present in the entire European economy of a probable new recession. Meanwhile, factors such as a value added tax to be levied on the print media - which could also have a considerable impact on jobs at Itella - remain as part of the planning. In terms of Itella's business operations, the most positive trend is evident in Logistics, the operative business of which was profitable during the third quarter. Particular improvement is also evident in both domestic and Russian warehouse fill rates and profitability. The central aspects in the Information business area are the integration of operations and the related growth outlook following the OpusCapita acquistion in June. Regarding domestic postal services, development has remained weak, with the exception of the domestic parcel business. We are in the midst of a significant structural change concerning postal operations with a global reach, and this is occurring simultaneously in most developed countries. In Finland, the decline in the volumes of the print media has been considerable. It is becoming increasingly clear and unavoidable that we are in a situation where citizens find changes to the accustomed service infrastructure unwelcome but, on the other hand, the service is not considered crucial enough for there to be a willingness to pay for its full costs. From a broader perspective, the state of society at large seems similar: five-day postal delivery, for example, is considered important, but not important enough to prompt a great amount of eagerness to direct already scarce tax revenue to it. This creates a challenge; tackling it requires vision and courage. I believe that in the next few years we will see the beginning of a renewed Europe-wide dialog in which the demand for traditional postal services will be reconciled with the other models of solution offered by the information society. When the time comes, we must decide on the level of service that must truly be available everywhere - even in places where increased competition does not generate adequate services.” APPENDICES Itella's full Interim Report FURTHER INFORMATION Sari Helander, CFO, tel. +358 (0)20 4520 907, sari.helander@itella.com DISTRIBUTION NASDAQ OMX Helsinki Key media http://www.itella.fi/group/english/financials/ FINANCIAL CALENDER 2012 Financial Statements Bulletin 2011 to be released on February 17, 2012 PHOTOGRAPS AND LOGOS www.itella.fi/media Itella Group provides solutions for managing information and product flows. Itella operates in the fields of mail Communications, information logistics, and logistics in Europe and Russia. Net sales in 2010 amounted to EUR 1,842 million. The number of staff is about 28,000. Corporate services are delivered under the Itella brand, while the Posti brand is used for services targeted at consumers in Finland. More information is available online at www.itella.fi/group/english. |
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