2015-02-13 09:00:00 CET
2015-02-13 09:00:06 CET
REGULATED INFORMATION
Posti Group Corporation - Annual Financial Report
POSTI GROUP CORPORATION’S FINANCIAL STATEMENTS RELEASE, FEBRUARY 13, 2015 AT 10:00 A.M. (EET)
Posti Group's strategy is advancing - the industry and the market are
undergoing a dramatic transformation
Posti Group Corporation's Financial Statements and Board of Directors' Report
for 2014
October-December 2014
-- The Group's net sales decreased by 7.0% to EUR 491.7 (528.8) million in
October-December.
-- Net sales decreased by 2.7% in Itella Mail Communications, by 9.0% in
Itella Logistics and by 26.7% in Itella Russia, and increased by 2.6% in
OpusCapita. Measured in local currency, Itella Russia's net sales increased
by 0.7%.
-- Posti Group's operating result before non-recurring items was EUR 23.5
(26.3) million, representing 4.8% (5.0%) of net sales. The operating result
before non-recurring items improved to EUR 35.8 (33.8) million in Itella
Mail Communications, but decreased to EUR -11.0 (-8.9) million in Itella
Logistics, to EUR 2.1 (2.4) million in Itella Russia and to EUR 3.4 (4.3)
million in OpusCapita.
-- Posti Group's operating result for the fourth quarter was EUR 10.9 (12.3)
million, or 2.2% (2.3%) of net sales. Non-recurring items recognized during
the period totaled EUR 12.6 (14.0) million.
-- A new one-year collective agreement was signed for mail communications and
logistics area in the end of October. The agreement covers approximately
18,000 employees.
-- In late 2014, Posti gave up air and sea freight in Scandinavia as well as
service warehouses in Denmark and outsourced the distribution logistics
within Scandinavia. Service warehouses in Sweden and Norway will be given
up in 2015.
-- On October 1, 2014, OpusCapita acquired the Norwegian Norian Group.
Year 2014
-- Posti Group's net sales decreased by 6.0% to EUR 1,858.7 (1,976.8) million.
In local currencies, the decrease in net sales was 3.5%. International
operations constituted 26.9% (28.9%) of net sales.
-- Net sales decreased by 1.9% in Itella Mail Communications, by 8.7% in
Itella Logistics, by 16.3% in Itella Russia, and by 1.4% in OpusCapita.
Measured in local currency, Itella Russia's net sales increased by 0.7%.
-- The operating result before non-recurring items improved slightly and
amounted to EUR 50.8 (50.5) million, or 2.7% (2.6%) of net sales.
-- The operating result decreased to EUR 5.8 (9.9) million, or 0.3% (0.5%) of
net sales. The operating result was affected by EUR 45.0 (40.5) million in
non-recurring items, of which EUR 25.8 (17.5) million was related to
personnel restructuring, with other non-recurring items totaling EUR 19.2
(23.0) million.
-- The result before taxes was EUR -4.6 (-2.4) million.
-- The Group's cash flow from operating activities improved, amounting to EUR
93.2 (81.4) million before investments.
-- Gearing was 17.2% (21.1%). Equity ratio stood at 45.9% (47.5%). The
substantial depreciation of the ruble had a negative effect on the equity
ratio.
-- In August, Posti launched a new, EUR 75 million performance improvement
program for 2015-2016. Throughout the year, the company conducted several
cooperation negotiations, and the number of employees decreased by 2,588
year-on-year.
-- The Board of Directors proposes to the Annual General Meeting that no
dividend be distributed for 2014.
Key figures of Posti Group
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10-12/ 10-12/ 1-12/ 1-12/
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2014 2013 2014 2013
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Net sales, EUR million 491.7 528.8 1,858.7 1,976.8
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Operating result (non-IFRS), EUR million* 23.5 26.3 50.8 50.5
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Operating result (non-IFRS), %* 4.8 5.0 2.7 2.6
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Operating result (EBIT), EUR million 10.9 12.3 5.8 9.9
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Operating result (EBIT), % 2.2 2.3 0.3 0.5
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Result before taxes, EUR million 7.6 9.6 -4.6 -2.4
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Result for the period, EUR million 4.5 17.6 -4.4 7.7
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Return on equity (12 months), % -0.7 1.1
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Return on invested capital (12 months), % 1.0 1.3
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Equity ratio, % 45.9 47.5
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Gearing, % 17.2 21.1
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Gross capital expenditure, EUR million 14.6 19.8 57.5 61.1
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Average number of employees 24,617 27,253
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*) Non-IFRS = excluding non-recurring items
Heikki Malinen, President and CEO:
“In 2014, we implemented our new strategy systematically. Its key goal is to
transform our company into a modern, customer-oriented and high-quality postal
and logistics service provider. A part of this renewal process was the changing
of Itella's name to Posti at the beginning of this year. I am very pleased that
the name change has received such positive feedback from the public and our
customers. The name change has proved to be the right decision.
During the past year, accelerating digitization affected the Group's operations
more profoundly than ever before. The total volume of addressed letter items
declined by 10% and that of newspapers by 13%. In the next few years, the
transformation of communications and the postal industry will continue and be
at least as challenging as it is at the moment. If letter and publication
delivery volumes decrease at the pace of 10% per year, it will mean at least
EUR 60 million of lost net sales for Posti annually.
Digitization also offers Posti new growth opportunities. Thanks to increasing
e-commerce, we delivered a record-breaking number of parcels, nearly 33
million, last year. The number of users of the electronic mailbox Netposti
increased by 10% to nearly 600,000. Digitization also benefits OpusCapita, a
provider of financial accounting outsourcing services and automation solutions,
as electronic invoices and cloud services related to financial accounting
automation, which form part of its offering, are growing strongly. Indeed,
OpusCapita is an important cornerstone for Posti's strategy, which looks ahead
to 2020.
The Group's non-IFRS operating result improved to EUR 50.8 million. The
structural changes and adjustments carried out during the year increased
non-recurring items, which decreased the operating result from the previous
year. In Mail Communications, the result remained good, thanks to savings,
efficiency improvement measures and price increases. In Logistics, net sales
decreased by 8.7%. The decrease was due to the very difficult market situation
and intense competition in logistics and trade.
A positive highlight is Itella Russia, which achieved a profitable result in an
extremely challenging market situation. Itella Russia's euro-denominated net
sales declined due to the substantial depreciation of the ruble. However, this
year is becoming a difficult one as the Russian economy is sliding into
recession. The weak ruble, the decreasing oil price and sanctions affect the
Russian economy and consumer purchasing power negatively, which decreases
demand for logistics services.
Last year, adjustment to the transformation of the postal industry and
logistics required, unfortunately, the Group to make extensive personnel
reductions that were carried out in as responsible and controlled manner as
possible. Through the Uusi polku (New path) program, we have supported the
personnel financially and offered retraining coaching.
In Logistics, we also took extensive efficiency improvement measures and
eliminated highly unprofitable operations in Scandinavia, for example.
Logistics managed to improve its result, although the operating result still
showed a clear loss. Continued economic recession has made a fast turnaround
more difficult. Efficiency improvement measures will be continued with a new
program aiming to ensure the Group's profitability through the recession. We
are focusing on our core business operations instead of expansion.”
APPENDICES
Financial Statements Release and the Board of Directors' Report (PDF)
Corporate Governance Statement 2014 (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 2015
Interim Report Q1/2013, April 30
Interim Report Q2/2013, July 17
Interim Report Q3/2014, November 2
IMAGES AND LOGOS
www.posti.com/media
Posti Group is your first choice in postal, logistics and e-commerce services.
We manage the flow of commerce and everyday life in 11 countries. Our net sales
in 2014 amounted to EUR 1,859 million. We employ approximately 23,000
professionals who serve our customers in Finland under the name Posti and in
other countries under the name Itella. www.posti.com.
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