POSTI GROUP CORPORATION'S FINANCIAL STATEMENTS RELEASE, FEBRUARY 28, 2017 AT 12:00 (EET)
Posti Group Corporation's Financial Statements Release 2016
Changes in reporting and revenue recognition principles
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 the results of its 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.
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, such as 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 certain statistical model that incorporates historical sales and usage volumes as well as price changes.
Posti published a stock exchange release 'Change in reportable segments and the revenue recognition principle for stamps' on January 24, 2017 where it said: "Posti excludes the impact of acquisitions and divestments so that net sales of acquired or divested businesses is not taken into account in calculating the comparable net sales. The net sales of divested businesses is excluded also from the figures of the comparative period." Departing from the statement, Posti will not disclose comparable net sales as of the last quarter of 2016. This means that the net sales of acquired or divested businesses is included in the net sales.
Posti changed its terminology for Alternative Performance Measures in accordance with the new guidelines issued by the European Securities and Markets Authority (ESMA) as of the interim report for the second quarter of 2016. "Non-recurring items" was replaced by "special items". "Operating result before non-recurring items" was 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 financial statements release and at www.posti.com/financials.
Figures in brackets refer to the comparison period, i.e. the same period last year, unless otherwise stated.
|Key figures of Posti Group|| |
|restated** 10-12/2015|| |
|Net sales, EUR million||456.5||433.2||1,607.6||1,649.1|
|Adjusted EBITDA, EUR million||43.0||43.2||126.7||128.2|
|Adjusted EBITDA, %||9.4||10.0||7.9||7.8|
|EBITDA, EUR million||38.6||30.6||116.0||147.2|
|Adjusted operating result, EUR million||22.7||24.0||47.1||47.6|
|Adjusted operating result, %||5.0||5.5||2.9||2.9|
|Operating result, EUR million||14.2||8.3||30.7||54.8|
|Operating result, %||3.1||1.9||1.9||3.3|
|Result before taxes, EUR million||14.7||4.7||29.5||42.3|
|Result for the period, EUR million||10.4||3.1||23.2||35.1|
|Cash flow from operating activities||63.1||81.9|
|Return on equity (12 months), %||3.9||6.2|
|Return on invested capital (12 months), %||5.1||6.4|
|Equity ratio, %||54.9||46.9|
|Gross capital expenditure, EUR million||23.3||17.1||100.4||66.8|
|Average number of employees||20,632||22,219|
|Dividend, EUR million||60.0*||18.0|
*) Board of Directors' proposal to the Annual General Meeting
**) Restated due to change in the revenue recognition principle
Heikki Malinen, President and CEO:
During the past five years, Posti has gone through the most radical period of transformation in its entire history. Digitization has drastically reduced traditional communication while, at the same time, the Finnish economy and the entire logistics industry have been in a recession. It was another challenging year for the Group in 2016 but, particularly in the last quarter, there were already signs of a turn for the better.
The Group's net sales turned to an increase of more than 5% in the final quarter of the year. Particularly gratifying was the substantial growth achieved in parcel services, where B2C volume increased by almost 13%, boosted by e-commerce, and cross-border parcel services volume grew by more than 7%. The net sales of parcel services grew by nearly 6% in the fourth quarter. We also saw growth in our logistics services. Organic growth was nearly 8% and the overall net sales of logistics services grew by 29% in the fourth quarter.
Posti's profitability in 2016 remained good in spite of the difficult market situation. Adjusted EBITDA even improved in the Mail, Parcel and Logistics Services segment. The Group's adjusted EBITDA, EUR 126.7 million, was on par with the previous year. We are very pleased that Itella Russia finished a difficult year with a better result than previous year. OpusCapita also improved its profitability in the last quarter of the year.
Our operating cash flow from operating activities was good at EUR 63.1 million. The consolidated balance sheet remains strong in spite of the repayment of a EUR 150 million bond late in the year. Due to the strong balance sheet, the Board of Directors proposes the payment of a significant extra dividend.
Although Posti is Finland's leading company in the postal and logistics industry, company will continue its resolute renewal to adjust to the rapid trend of digitization in society. Digitization is inevitable, with addressed letter volumes falling by another 7% in 2016. For this reason, renewal and growth are the main focus of our strategy, which was updated last year. In spite of the decline in volume, postal services will remain a central area of our operations. Postal services are very significant to Posti's profitability and we believe that the upcoming reform of the Postal Act will help extend the life cycle of traditional communication.
Parcel and logistics services represent the engine of Posti's future growth. We provide the most extensive nationwide logistics and retail network as well as a comprehensive supply chain. Last year, Posti acquired Veine and Kuljetus Kovalainen, two transport companies that specialize in temperature-controlled logistics, to support our pursuit of new growth in food logistics. It is also very significant that Posti is now part of DHL's European parcel alliance, which improves our competitiveness in international e-commerce and parcel delivery. Higher e-commerce volumes have already had a visible positive effect on domestic warehousing services as well as the increase in the net sales of Itella Russia's MaxiPost.
I want to thank Posti's employees for their important work in 2016 to ensure a smoother everyday life for our customers. The implementation of renewal measures in delivery operations last fall resulted in some regrettable disruptions. We are sorry for the inconvenience caused by the disruptions and, after working hard to rectify the situation in early 2017, we have restored our delivery quality to a very good level at above 99%. I wish to thank our customers for their trust.
Posti Group's Financial Statements Release in full (PDF)
Heikki Malinen, President and CEO, and Sari Helander, CFO
Tel. +358 20 452 3366 (MediaDesk)
FINANCIAL CALENDAR IN 2017
Financial Statements Release for 2016: February 28, 2017, at 12:00
Financial Statements for 2016: March 8, 2017, at 9:00
Interim Report Q1/2017: April 28, 2017, at 9:00
Interim Report Q2/2017: July 27, 2017, at 12:00
Interim Report Q3/2017: October 26, 2017, at 9:00
NASDAQ OMX Helsinki
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 ten countries. Our net sales in 2016 amounted to EUR 1,608 million. We employ approximately 20,500 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.