2016-04-29 09:00:01 CEST
2016-04-29 09:00:01 CEST
REGULATED INFORMATION
Posti Group Corporation - Interim report (Q1 and Q3)
Posti Group’s net sales decreased - a positive start to the year in Postal Services
POSTI GROUP CORPORATION INTERIM REPORT, APRIL 29, 2016 AT 10:00 A.M. (EET)
Posti Group Corporation Interim Report Q1/2016
-- The Group’s net sales decreased by 10.4% and amounted to EUR 390.6 (435.9)
million in January–March. Comparable net sales, excluding divested
businesses, decreased by 5.5%.
-- Net sales decreased by 3.7% in Postal Services. Net sales decreased by
16.3% in Parcel and Logistics Services and comparable net sales, excluding
the international freight business, by 4.9%. In OpusCapita, comparable net
sales, excluding the divested Baltic businesses, decreased by -4.8%, and
net sales by 9.1%. In Itella Russia, net sales decreased by 24.3%, and
measured in local currency, by 12.0%.
-- The operating result before non-recurring items decreased to EUR 15.0
(20.6) million, or 3.8% (4.7%) of net sales.
-- The operating result before non-recurring items improved to EUR 24.8 (21.0)
million in Postal Services and declined to EUR -5.3 (1.0) million in Parcel
and Logistics Services, to EUR -2.4 (-0.9) million in Itella Russia, and to
EUR 2.0 (4.7) million in OpusCapita.
-- The operating result was weighed down by non-recurring items in the amount
of EUR -10.3 (0.0) million, with personnel restructuring costs representing
the most significant proportion of the non-recurring items.
-- The operating result decreased to EUR 4.7 (20.5) million, or 1.2% (4.7%) of
net sales.
-- Cash flow from operating activities declined to EUR 29.1 (35.2) million.
-- 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.
-- On January 26, 2016, Posti started cooperation negotiations concerning
administration and basic delivery in the Operations unit, the entire Sales
and Customer Services unit, and certain Group Functions. The target group
of the negotiations consisted of 7,600 employees and the reduction need was
at most 860 people. Posti’s support program significantly reduced the
number of layoffs down to 181.
-- OpusCapita revised its operating model and commenced cooperation
negotiations on February 8, 2016, to reduce approximately 80 positions. The
outcome of the negotiations was a reduction of approximately 70 persons.
-- Kaarina Ståhlberg, LL.M., was appointed as Posti Group’s VP, Legal Affairs,
and a member of the Management Board, effective from March 1, 2016.
Key figures of Posti Group 1–3 1–3 1–12
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2016 2015 2015
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Net sales, EUR million 390.6 435.9 1,650.3
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Operating result (non-IFRS), EUR million* 15.0 20.6 48.7
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Operating result (non-IFRS), %* 3.8 4.7 2.9
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Operating result (EBIT), EUR million 4.7 20.5 55.9
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Operating result (EBIT), % 1.2 4.7 3.4
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Result before taxes, EUR million 3.5 21.3 43.3
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Result for the period, EUR million 3.4 15.9 36.0
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Cash flow from operating activities 29.1 35.2 81.9
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Return on equity (12 months), % 3.9 1.2 6.1
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Return on invested capital (12 months), % 4.2 3.1 6.3
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Equity ratio, % 46.5 46.6 47.8
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Gearing, % -14.8 11.7 -10.5
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Gross capital expenditure, EUR million 11.4 16.5 60.6
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Average number of employees 20,577 22,579 22,219
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Dividend, EUR million 18.0
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*) Non-IFRS = excluding non-recurring items
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Heikki Malinen, President and CEO:
“In the first quarter, Posti actively continued its renewal and efficiency
improvement measures as digitization is reducing traditional mail delivery
volumes and changing customer behavior. The EUR 75 million savings target of
the Group’s performance improvement program 2015–2016 has now been achieved.
The cost reductions partly compensated for the decrease in net sales in the
first quarter. Unfortunately, it was also necessary to target personnel with
cost reduction measures. The number of redundancies was, however, significantly
reduced through Posti’s support program.
Posti Group’s operating result before non-recurring items was satisfactory in
January–March, but declined to EUR 15.0 year-on-year. The positive aspect was
the improved result of Postal Services in spite of lower volume. The factors
affecting the business group’s result in January–March included efficiency
improvement measures, cost cuts and price increases, as well as Easter mailing
volume falling in the first quarter. New growth has been achieved in forwarding
shipments from Chinese online stores to Russia.
The upcoming reform of the Postal Act will completely deregulate the delivery
of letter mail in Finland by eliminating requirements concerning postal
licenses and delivery days from other operators. While we welcome competition
in the delivery of letters, the relevant regulatory provisions must be fair.
Under current regulations, Posti is subject to tougher delivery obligations
than other operators. For this reason, it is important that the regulations
pertaining to Posti’s universal service obligation are eased by the reform of
the Postal Act.
For the Parcel and Logistics Services business group, the first quarter
included significant successes in spite of the result showing a loss due to
upfront investments, intensifying competition and the challenging market
situation. Posti won several major accounts in the first quarter, involving
various logistics services ranging from transport to full-service supply chain
solutions. The new contracts strengthen Posti’s position as the largest
logistics company in Finland.
In March, Posti signed a significant agreement on joining the DHL partner
network, giving Posti’s e-commerce customers access to a parcel delivery
network covering 16 countries and 43,000 service points. At the same time,
Posti will open a network of 1,200 pickup points in the Baltic countries. These
concrete measures give Finnish online stores better opportunities to sell their
products in the international market.
Itella Russia’s net sales and operating result continued to be weighed down by
the weak ruble, the economic climate in Russia and weaker demand for logistics
services. The company has sought to improve profitability through significant
cost cuts. While the Russian economy has contracted, the consumer e-commerce
market in Russia is seeing substantial growth. In March, Itella Russia acquired
the Russian courier company MaxiPost to expand its services to include parcel
delivery in Russia. MaxiPost delivered more than a million parcels last year.
OpusCapita, which provides automation and software solutions for financial
management, continued to invest in its new strategy as well as new e-invoicing
services and cloud services, which was reflected in its result for the first
quarter. In addition, the demand for paper-based products continued to decline
due to digitization, and this decline in volume weighed down on the first
quarter’s operating result.
The business environment will remain very challenging in 2016 due to the
subdued economic development in Finland. Transport volumes in heavy traffic
have decreased in Finland for 47 consecutive months, starting from May 2012. We
maintain our estimate, according to which comparable net sales in euros for
2016 are expected to decrease compared to 2015, and Posti’s result before
non-recurring items is expected to remain at the previous year’s level. No
quick turnaround is expected in the Russian economy and the development of the
ruble exchange rate, which means that Itella Russia’s business continues to
involve significant uncertainty factors. Posti is in the midst of a major
industry transformation. We are resolutely implementing our new strategy that
will improve the Group’s profitability and enable investments in future growth
areas.”
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)
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.posti.com/financials
FINANCIAL CALENDAR IN 2016
January–June: July 18, 2016
January–September: October 31, 2016
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 nine countries. Our net
sales in 2015 amounted to EUR 1.65 billion. We employ approximately 22,000
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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