Posti Group Corporation - Other information disclosed according to the rules of the Exchange

Posti: Change in reportable segments and the revenue recognition principle for stamps

POSTI GROUP CORPORATION, STOCK EXCHANGE RELEASE, JANUARY 24, 2017 AT 10:00 EET

Helsinki, 2017-01-24 09:13 CET (GLOBE NEWSWIRE) -- Posti Group Corporation has
changed its reportable segments as well as its revenue recognition principles
for prepaid services effective from the fourth quarter of 2016. 

Changes to segment reporting

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 its results of 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. 

The new reportable segment for the most part shares common operative functions,
such as production, the retail network and customer service. These functions
represent the majority of the combined segment’s expenses. The aggregated
operating segments are similar in terms of their financial characteristics,
services, production processes, customers and distribution channels. 

In conjunction with the change in reportable segments, the Group has also
changed its principles for the allocation of Group’s support functions to the
businesses. More costs of support functions have now been allocated to the
businesses and reportable segments. 

Change in the revenue recognition principle for stamps

As part of the adoption process of the new IFRS revenue recognition standard,
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, including 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 statistical model that incorporates
historical sales and usage volumes as well as price changes. The services to be
performed after the reporting date are accrued as deferred revenue liability on
the balance sheet. The deferred revenue liability is presented on the balance
sheet as current and non-current. 

The impacts of the change in the revenue recognition principle on the
consolidated income statements, balance sheets and cash flow statements, the
adjusted segment-specific financial information and the key figures for the
years 2014–2015 and Q1–Q3/2016 are presented as an attachment to this release
in accordance with the provisions of IAS 8 “Accounting Policies, Changes in
Accounting Estimates and Errors”. The changes are presented retrospectively
starting from January 1, 2014 to increase longer term comparability. 

For further information, please contact

Posti’s MediaDesk: tel. +358 (0)20 452 3366

(Mon-Fri at 9:00-16:30)

Posti Group is your first choice in postal, logistics and e-commerce services.
We manage the flow of commerce and everyday life in 10 countries. Our net sales
in 2015 amounted to EUR 1,650 million. 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 our services in Finland are carbon
neutral. www.posti.com.

Attachments:

Posti-Group-Restated-financial-information-2014-Q32016.pdf