Itella's net sales decreased - profitable operating result in Russia



Itella Corporation Interim Report Q3/2014

July-September 2014


January-September 2014


Key figures of Itella Group          
  7-9 7-9 1-9 1-9 1-12
  2014 2013 2014 2013 2013
Net sales, EUR million 435.1 457.0 1,367.0 1,448.0 1,976.8
Operating result (non-IFRS), EUR million* 6.8 8.0 27.3 24.1 50.5
Operating result (non-IFRS), %* 1.6 1.7 2.0 1.7 2.6
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
Return on invested capital (12 months), %     1.3 1.1 1.3
Equity ratio, %     47.2 47.6 47.5
Gearing, %     19.9 30.3 21.1
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
*) Non-IFRS = excluding non-recurring items, see Appendix 2.        



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."

Itella's full Interim Report

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.)

NASDAQ OMX Helsinki 
Key media


Financial Statements for 2014: February 13, 2015




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.