2017-07-27 12:00:23 CEST
2017-07-27 12:00:23 CEST
REGULATED INFORMATION
Posti Group Corporation - Half Year financial report
Posti Group Corporation: Posti Group improved its operating result in January-June 2017
Posti Group Corporation Half-year Report January-June 2017
April-June
Financial highlights
* The Group's net sales increased by 3.4% to EUR 402.3 (389.0) million.
* The Group's adjusted EBITDA declined to EUR 19.8 (21.8) million, 4.9%
(5.6%).
* The Group's EBITDA declined to EUR 12.8 (17.0) million, 3.2% (4.4%).
* The adjusted operating result declined to EUR 0.3 (1.9) million, or 0.1%
(0.5%) of net sales.
* The operating result declined to EUR -7.6 (-2.9) million, or -1.9% (-0.7%)
of net sales.
Operational highlights
* The number of working days was 60 (63). Easter fell in the second quarter of
2017, unlike last year, when it fell in the first quarter. The number of
working days in April-June was lower than in the previous year by three
days. The number of working days affects the Group's net sales and result,
having an impact on both year-on-year comparison and consecutive quarter
comparison
* Measured in waybills, Posti's domestic freight grew by 4%. The combined
parcel volume of Finland and the Baltic countries increased by 4%. The
number of addressed letters delivered by Posti in Finland decreased by 10%.
* Posti's structural transformation continued:
* On April 3, 2017, Posti and Solemo Oy announced that they have signed an
agreement on establishing Flexo, a joint venture that will provide in-
house logistics services. The Finnish Competition and Consumer Authority
approved the joint venture on April 25, 2017.
* On May 4, 2017, OpusCapita, part of Posti Group, announced that it will
sell its Finance and Accounting Outsourcing business to Longship, a
Norwegian private equity investor. The transaction is estimated to be
finalized in September.
* On June 12, 2017, Posti announced the acquisition of the personal
assistance business of SOL Henkilöstöpalvelut Oy.
* On May 29, 2017, Posti announced that it is strengthening its early-
morning delivery by acquiring the early-morning delivery business of
Kaakon Viestintä. On June 27, 2017, Posti announced that it will merge
its early-morning delivery operations into a newly established
subsidiary, Posti Palvelut Oy.
* OpusCapita, part of Posti Group, will outsource its digitizing
production in Sweden, Norway and Poland to the US-based BancTec. The
change is expected to enter into effect within 2017.
* Mail items covered by the universal service obligation accounted for 4.2%
(3.8%) of all of Posti's mail items.
January-June
Financial highlights
* The Group's net sales increased by 5.3% to EUR 816.1 (775.1) million.
* The Group's adjusted EBITDA improved to EUR 55.3 (51.6) million, 6.8%
(6.7%).
* The Group's EBITDA improved to EUR 42.9 (38.2) million, 5.3% (4.9%).
* The adjusted operating result improved to EUR 15.8 (12.7) million, or 1.9%
(1.6%) of net sales.
* The operating result improved to EUR 2.5 (-2.3) million, or 0.3% (-0.3%) of
net sales.
* In April, in line with the decision of the Annual General Meeting held on
March 27, 2017, Posti distributed a dividend of EUR 25 million on the net
profit for the financial year and an extra dividend of EUR 35 million. The
total dividend distribution amounted to EUR 60 million.
Operational highlights
* The number of working days was 124 (124).
* Measured in waybills, Posti's domestic freight grew by 8%. The combined
parcel volume of Finland and the Baltic countries increased by 6%. The
number of addressed letters delivered by Posti in Finland decreased by 9%.
* As part of the Group's structural transformation, Posti acquired the home
care and personal assistance service provider HR Hoiva Oy (now known as
Posti Kotipalvelut Oy) in the first quarter.
* In March, Posti began the construction of a 26,000 m(2) freight terminal on
Suokalliontie in Vantaa, Finland. The new terminal represents a response to
the growth of the freight business.
* Mail items covered by the universal service obligation accounted for 4.3%
(4.6%) of all of Posti's mail items.
Outlook
* Net sales in euros for the year are further expected to increase compared to
the previous year. The Group's adjusted operating result is further expected
to remain on par with the previous year. The operating result for 2017 will
include significant special items.
Figures in brackets refer to the comparison period, i.e. the same period last
year, unless otherwise stated.
Key figures of Posti Group
4-6 2017 4-6 2016 1-6 2017 1-6 2016 1-12 2016
-------------------------------------------------------------------------------
Net sales, EUR million 402.3 389.0 816.1 775.1 1,607.6
Adjusted EBITDA, EUR million 19.8 21.8 55.3 51.6 126.7
Adjusted EBITDA, % 4.9 5.6 6.8 6.7 7.9
EBITDA, EUR million 12.8 17.0 42.9 38.2 116.0
EBITDA, % 3.2 4.4 5.3 4.9 7.2
Adjusted operating result, EUR
million 0.3 1.9 15.8 12.7 47.1
Adjusted operating result, % 0.1 0.5 1.9 1.6 2.9
Operating result, EUR million -7.6 -2.9 2.5 -2.3 30.7
Operating result, % -1.9 -0.7 0.3 -0.3 1.9
Result before taxes, EUR million -12.3 -1.4 -2.6 -2.0 29.5
Result for the period, EUR
million -13.0 -0.8 -7.0 -0.8 23.2
Cash flow from operating
activities 28.2 28.2 63.1
Return on equity (12 months), % 3.0 0.5 3.9
Return on invested capital (12
months), % 4.8 1.2 5.1
Equity ratio, % 49.3 47.0 54.9
Gearing, % -3.7 -4.3 -13.6
Gross capital expenditure, EUR
million 11.9 48.4 36.3 59.8 100.4
Employees on average 20,334 20,838 20,632
Employees on average, FTE 18,323 18,676 18,529
Dividends, EUR million 60.0
Heikki Malinen, President and CEO
"The ongoing trend of digitization in the business environment remains strong
and reflects directly on Posti, with the Group undergoing a multi-year
structural transformation as communication shifts from paper to digital and
competition increases in traditional postal operations. The sharp decline in the
volume of addressed letters continued, with the rate of decrease being 10% in
the second quarter. However, digitization is also a source of opportunities for
Posti. Posti continues to build new cornerstones for its business in growing
markets according to its strategy: the areas of future growth are in parcel and
logistics services, the demand for which was boosted by the favorable economic
climate and growth in e-commerce in the second quarter.
Net sales increased by 3.4% in the second quarter. While letter product volumes
continued to fall, the volumes of parcel and logistics products showed favorable
development. Adjusted for the number of working days, parcel volume grew by 10%
and freight volume by 9% in Finland. Net sales increased by 20.9% in Logistics
Services and by 0.5% in Parcel Services. The increase in net sales was also
significantly supported by the Group's expansion through acquisitions as well as
the strenghtening of Russian ruble. Digitization and the market entry of new
players have had a substantial effect on the volumes of basic services, but
pricing changes have mitigated the financial impacts of declining mail volumes.
We continued our determined and collective effort to ensure high quality. Growth
was sought through corporate transactions in areas including in-house logistics,
personal assistance services and the delivery of publications.
Posti's adjusted EBITDA in the second quarter was 4.9%. The distribution of the
net sales and result between the first and second quarter was affected by Easter
falling in April this year. The improved profitability of logistics services was
supported by a general increase in demand as well as the improved efficiency of
operations. OpusCapita's EBITDA decreased. Posti's adjusted operating result for
the first half of the year improved and represented 1.9% of net sales.
Itella Russia's net sales grew by 15.9% measured in euros, but declined by 2.7%
in rubles. The measures taken to improve the profitability of Itella Russia's
operations are showing good results already in the half-year period and the
adjustment of the cost structure will continue.
OpusCapita is moving forward with its transformation as planned. The Buyer-
Supplier Ecosystem business unit continued its global growth. A transaction to
divest the financial management outsourcing business is in the implementation
phase. The sending of documents and invoices as well as digitizing operations in
Finland will be transferred to Posti's Postal Services business group within
2017. OpusCapita's digitizing production in Sweden, Norway and Poland will be
outsourced. Following these corporate transactions, OpusCapita will focus on
pursuing growth in the Buyer-Supplier Ecosystem business.
The Postal Act reforms approved by the Finnish Parliament in June are an
important decision for Posti. They enable the reform of delivery obligations to
correspond to the accelerating digital transformation, thereby improving Posti's
operating conditions in competitive markets and promoting the introduction of
new business concepts and technologies. The reforms are also aimed at
maintaining the cost-effective provision of universal services throughout the
country in the coming years without public subsidies."
APPENDICES
Posti Group's Half-year Report in full (PDF)
FURTHER INFORMATION
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)
FINANCIAL CALENDAR IN 2017
Interim Report Q3/2017: October 26, 2017, at 9:00
DISTRIBUTION
NASDAQ OMX Helsinki
Key media
www.posti.com/financials
IMAGES AND LOGOS
www.posti.com/newsroom
Posti is a service provider that delivers the smartest and most customer-focused
postal and logistics services in the market. Posti is expanding into new service
areas and playing an increasingly significant role in the daily life of its
customers. We operate in ten countries, our net sales in 2016 amounted to EUR
1,600 million and the number of our personnel is approximately 20,500. Our
businesses also include the logistics service provider Itella Russia and the
electronic business specialist OpusCapita. www.posti.com.
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