Posti Group Corporation Interim Report January-June 2016
Posti has changed its terminology for Alternative Performance Measures in accordance with the new guidelines issued by the European Securities and Markets Authority (ESMA). "Non-recurring items" has been replaced by "special items". "Operating result before non-recurring items" has been replaced by "adjusted operating result". The definitions for these performance measures and for items affecting the comparability of reported figures are provided in the section "Calculation of key figures" of this interim report and on Posti's website at www.posti.com/financials. The change takes effect starting from the interim report for the second quarter of 2016.
|Key figures of Posti Group||4-6||4-6||1-6||1-6||1-12|
|Net sales, EUR million||385.9||406.3||776.5||842.2||1,650.3|
|Operating result (adjusted), EUR million*||-0.9||-6.8||14.0||13.7||48.7|
|Operating result (adjusted), %*||-0.2||-1.7||1.8||1.6||2.9|
|Operating result (EBIT), EUR million||-5.7||27.9||-1.0||48.4||55.9|
|Operating result (EBIT), %||-1.5||6.9||-0.1||5.8||3.4|
|Result before taxes, EUR million||-4.2||22.8||-0.7||44.2||43.3|
|Result for the period, EUR million||-3.1||17.0||0.3||32.8||36.0|
|Cash flow from operating activities||28.2||33.3||81.9|
|Return on equity (12 months), %||0.5||4.4||6.1|
|Return on invested capital (12 months), %||1.2||5.8||6.3|
|Equity ratio, %||47.9||48.0||47.8|
|Gross capital expenditure, EUR million||48.6||15.5||59.9||32.0||60.6|
|Average number of employees||20,838||22,691||22,219|
|Dividend, EUR million||18.0|
|*) Adjusted = excluding special items|
Heikki Malinen, President and CEO:
"The first half of the year was a satisfactory one for Posti in a difficult market climate. The Group's adjusted operating result for April-June improved to EUR -0.9 million and the adjusted operating result for January-June improved to EUR 14.0 million in spite of lower net sales across all business groups.
The economic climate in Finland and its neighboring areas remains weak but, for the first time in a long while, there are signs of economic recovery. The Russian economy remains in a recession, which has reduced the demand for Itella Russia's logistics services. Nevertheless, measured in local currency, Itella Russia's net sales increased by 3.4% in the second quarter. The Russian ruble appreciated in the first half of the year, but the closing rate at the end of the second quarter was still down by almost 15% year-on-year.
For the Parcel and Logistics Services business group, the second quarter was significant in many ways. Posti signed an agreement with Stockmann on transferring the logistics operations of Hobby Hall to Posti. Posti also announced it is expanding to food logistics by acquiring Veine, a company that specializes in temperature-regulated logistics, and by modernizing online grocery shopping. There were more good news in Parcel Services as the amount of parcels delivered by Posti in April-June increased by 4% in Finland and by 30% in the Baltic countries. The business group's comparable net sales, excluding the international freight business, grew and the adjusted operating result improved.
Posti renewed mail delivery with the aim of flexibly combining other services with delivery operations. The goal of the changes is to control the rise of unit costs in delivery operations, which is caused by declining volumes. The amount of addressed letter items fell by 7% and newspaper delivery volumes by 8% in January-June. The net sales and adjusted operating result of the Postal Services business group declined due to the decrease in volume.
OpusCapita is making a strong investment in new growth businesses. One important step in this strategy was the acquisition of the Germany-based software company jCatalog in April. The acquisition supports OpusCapita's aim of becoming a leader in the global buyer-supplier ecosystem. The integration of jCatalog with OpusCapita began immediately.
Following the amendments to the Postal Act that entered into force in June, the entire postal market is now open to free competition. According to the amended Postal Act, Posti's competitors may freely deliver mail anywhere and at any time without being subject to universal service obligations. This puts Posti on very unequal footing with regard to the competition, as Posti will remain subject to the heavy five-day delivery obligation in spite of the universal service obligation only applying to less than 5% of Posti's delivered items today. With this in mind, we consider it essential that the universal service obligation is eased in the upcoming renewal of the Postal Act. Easing regulations concerning universal service allows for better control over the changes in unit costs. Renewing the regulations will allow Posti to continue to fulfill its universal service obligation throughout Finland.
The Finnish Government drew its new ownership steering policies in the spring. Pursuant to the Parliament's decision, 49.9% of the ownership of Posti Group Corporation will be transferred to a newly established development company tasked with developing the ownership structure of the companies it owns. The Finnish State's holding in Posti Group Corporation will remain at 50.1% at a minimum. The privatizations of national postal services in Europe have shown that listings have resulted in improved financial performance and service quality.
In June, Posti updated its strategic goals aimed at Posti's renewal and profitable growth in new services. Posti wants to be the leading provider of logistics and postal services in Finland. We are making good progress toward achieving this objective."
Posti Group's Interim Report in full (PDF)
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)
NASDAQ OMX Helsinki
FINANCIAL CALENDAR IN 2016
January-September: October 31, 2016
IMAGES AND LOGOS
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 1,650 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 of our services in Finland are carbon neutral. www.posti.com.Posti-Group-Corporation-Interim-Report-Q2-2016.pdf