2014-11-03 09:00:00 CET
2014-11-03 09:00:03 CET
REGULATED INFORMATION
Itella Oyj - Interim report (Q1 and Q3)
Itella’s net sales decreased – profitable operating result in Russia
ITELLA CORPORATION INTERIM REPORT, JANUARY-SEPTEMBER 2014, NOVEMBER 3, 2014 AT
10:00 (EET)
Itella Corporation Interim Report Q3/2014
July-September 2014
-- Itella Group's net sales in July-September decreased by 4.8% compared to
the previous year and was EUR 435.1 (457.0) million. The decrease was due
to the weakening and intense competition of the logistics market as well as
currency depreciation. Mail delivery volumes continued to decline
substantially. Parcel traffic increased slightly.
-- Net sales remained largely unchanged from the previous year in Itella Mail
Communications, totaling EUR 254.5 (255.8) million, but decreased to EUR
145.9 (158.4) million in Itella Logistics, to EUR 47.2 (52.9) million in
Itella Russia and to EUR 60.4 (61.3) million in OpusCapita. Itella Russia's
net sales decreased by 1.2% measured in rubles.
-- The operating result before non-recurring items decreased, amounting to EUR
6.8 (8.0) million, or 1.6% (1.7%) of net sales. The operating result before
non-recurring items improved to EUR 3.6 (2.4) million in Itella Mail
Communications and was EUR -2.8 (-2.7) million in Itella Logistics and EUR
2.7 (3.0) million in Itella Russia. The operating result before
non-recurring items declined to EUR 5.1 (7.2) million in OpusCapita.
-- The third-quarter operating result was weighed down by non-recurring items
in the amount of EUR 14.1 (11.1) million. The operating result was EUR -7.4
(-3.1) million, or -1.7% (-0.7%) of net sales.
-- Itella will renew its logistics services in Scandinavia and plans to give
up air and sea freight as well as its service warehouses in Sweden, Norway
and Denmark. In the future, Itella's focus in Scandinavia will be on road
transport between its countries of operation.
-- On September 11, 2014, OpusCapita announced its acquisition of Norian
Group, a Norwegian financial accounting outsourcing company.
-- Itella Corporation will change its name to Posti Group Corporation as of
January 1, 2015. Itella Logistics Oy will merge with Itella Posti Oy on
January 1, 2015, and Itella Posti Oy will change its name to Posti Oy
(Posti Ltd).
-- As of January 1, 2015, the business groups will be: Postal Services, Parcel
and Logistics Services, Itella Russia and OpusCapita.
January-September 2014
-- Itella Group's net sales decreased in January-September by 5.6% to EUR
1,367.0 (1,448.0) million compared to the previous year. The decrease was
due to the decline and intense competition of the logistics market,
currency depreciation as well as lower volumes in mail delivery. At
comparable exchange rates, the decline in net sales was 3.8%.
-- Net sales decreased by 1.6% in Itella Mail Communications, by 8.5% in
Itella Logistics, by 12.5% in Itella Russia, and by 2.8% in OpusCapita.
Itella Russia's net sales grew by 0.8% measured in rubles.
-- The operating result before non-recurring items improved and amounted to
EUR 27.3 (24.1) million, or 2.0% (1.7%) of net sales.
-- The operating result before non-recurring items improved to EUR -11.7
(-15.6) million in Itella Logistics and decreased to EUR 31.6 (32.8)
million in Itella Mail Communications, to EUR 0.4 (2.8) million in Itella
Russia and to EUR 16.6 (18.1) million in OpusCapita.
-- The operating result decreased to EUR -5.1 (-2.4) million, or -0.4% (-0.2%)
of net sales. Non-recurring items recognized during the period totaled EUR
32.4 (26.5) million, of which EUR 22.0 (15.3) million was related to
personnel restructuring and EUR 10.4 (11.2) million to other items.
-- Cash flow from operating activities was EUR 50.7 (9.8) million. Gearing
remained at a good level and was 19.9% (30.3%).
Key figures of Itella Group
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7-9 7-9 1-9 1-9 1-12
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2014 2013 2014 2013 2013
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Net sales, EUR million 435.1 457.0 1,367.0 1,448.0 1,976.8
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Operating result (non-IFRS), EUR 6.8 8.0 27.3 24.1 50.5
million*
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Operating result (non-IFRS), %* 1.6 1.7 2.0 1.7 2.6
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Operating result (EBIT), EUR million -7.4 -3.1 -5.1 -2.4 9.9
--------------------------------------------------------------------------------
Operating result (EBIT), % -1.7 -0.7 -0.4 -0.2 0.5
--------------------------------------------------------------------------------
Result before taxes, EUR million -10.1 -5.2 -12.2 -12.0 -2.4
--------------------------------------------------------------------------------
Result for the period, EUR million -9.1 -3.7 -8.9 -9.9 7.7
--------------------------------------------------------------------------------
Return on equity (12 months), % 1.4 -0.7 1.1
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Return on invested capital (12 months), 1.3 1.1 1.3
%
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Equity ratio, % 47.2 47.6 47.5
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Gearing, % 19.9 30.3 21.1
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Gross capital expenditure, EUR million 12.0 14.2 42.9 41.3 61.1
--------------------------------------------------------------------------------
Average number of employees 25,132 27,669 27,253
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*) Non-IFRS = excluding non-recurring items,
see Appendix 2.
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Heikki Malinen, President and CEO:
“This year has been a time of major changes for Itella. Itella is implementing
a new strategy, which aims to adapt business operations to the profound
transformation in the industry, to renew the company so that it becomes more
agile, to ensure the company's profitability, to improve customer experience
and to seek new growth areas. The first change visible to our customers is that
Itella will change its name to Posti from the beginning of next year.
Unfortunately, the overall economic situation has not helped in driving growth.
On the contrary, the economy in Finland and neighboring regions, including
Russia, has declined further. The logistics market and retail have suffered
from the economic recession. Transport volumes in heavy traffic have decreased
in Finland for nearly 30 consecutive months. Particularly alarming is the
decrease in the delivery volumes of postal items, which continued very strongly
as digital communications are becoming more common.
Itella has responded to the impact of the transformation of the postal and
logistics industry with structural changes that have, unfortunately, entailed
personnel reductions. In addition, savings have been sought with a EUR 100
million performance improvement program, the target of which was achieved in
the third quarter. The improvement of operational efficiency will be continued
with a new EUR 75 million program. The new, more dynamic company structure will
take effect on January 1, 2015.
Furthermore, Itella has decided to renew its logistics services in Scandinavia
where the profitability of operations has not been sufficient. In the future,
we will focus on road transport between Itella's countries of operation. The
key strategy is to ensure the profitability of business operations.
A positive development is that Itella Group's operating result before
non-recurring items in January-September improved by more than 13% to EUR 27.3
million. However, the Group's net sales and operating result took a downward
turn in the difficult market situation. In Russia, we achieved a profitable
result and the third quarter was good there. The Ukrainian crisis has
influenced Itella's business in Russia indirectly through the weakening of the
ruble and consumer purchasing power. The market situation in Russia is expected
to decline in 2015.
The Group's cornerstones include OpusCapita that offers financial accounting
outsourcing services and automation solutions and has a strong growth strategy
aiming at internationalization. OpusCapita's position as a leading Nordic
service provider was strengthened by the business transaction carried out in
October in which OpusCapita acquired Norian Group, a Norwegian financial
accounting outsourcing company.
As the amount of traditional mail decreases, it is important to seek growth in
other logistics services, such as the delivery of parcels. We have invested
significantly in our service network that already consists of more than 1,400
service points. One of the fastest growing sectors for Itella is meal services
the net sales of which has grown by approximately 45% since 2012. Itella
delivers meals to schools, day-care centers and home care meal service
customers in some 80 locations. The service is well suited to Itella whose
strengths in logistics are reliability, professional skills of the personnel
and a nationwide network.”
APPENDICES
Itella's full Interim Report
FURTHER INFORMATION
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk, Mon-Fri 9:00 a.m. to 4:30 p.m.)
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.itella.com/financials
FINANCIAL CALENDAR IN 2015
Financial Statements for 2014: February 13, 2015
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Itella is your first choice for postal, logistics and e-commerce services. We
manage the flow of commerce and everyday life in 11 countries. Our net sales in
2013 amounted to EUR 1,977 million. We employ approximately 26,000
professionals. We deliver corporate services under the Itella brand, while the
Posti brand is used for services targeted at consumers in Finland.
www.itella.com.
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