Recession causes major decreases in mail delivery quantities

The economic recession has clearly reduced the number of letters, magazines, direct marketing messages and packages Itella delivers. In January and February 2009, Itella delivered 40 million letters, magazines and direct marketing messages, which was 8% less than in January and February 2008. The number of packages decreased by 10% from last year.

A decrease in volume could be seen in January and February in all the most important Itella delivery products:

• The number of first and second class letters decreased by a total of 7%. The reduction in the number of letters has been caused by the prevailing economic situation and also by the fact that more and more messages are sent in an electronic format. More recipients receive invoices or bank statements in an electronic format instead of a paper copy.
• The cutbacks that companies are making on marketing could be seen in the number of direct marketing messages delivered. The reduction in direct marketing in January and February was a total of 9%. The decrease was most dramatic in addressed direct marketing: the volumes decreased by 21%.
• In January and February, 12 million newspapers, magazines and city magazines were delivered, 10% less than in 2008.
• 10% less packages were delivered. As a result of the decrease in the number of packages, Itella has started statutory employer-employee negotiations at the Vantaa Logistics Centre to lay off some employees. 70% of all packages delivered by Itella in Finland go through the Vantaa Logistics Centre.
• Freight traffic has decreased by 20–30% in all countries where Itella does business, including Finland. A major decrease in volume can be seen in all Itella Logistics transport activities.

- The decrease in delivery volume was not unexpected. However, we did not expect the decrease to be so fast and steep. Our challenge is that our fixed costs remain pretty much the same even through the delivery volumes decrease. This is because most of our expenses come from salaries. We have to deliver mail on thousands of routes every weekday, regardless of how much mail there is for each household, says President and CEO Jukka Alho.

More information:
Jukka Alho, President and CEO of Itella Corporation, tel. +358 (0)20 451 5600

Photos pertaining to Itella are available in the Media section of the Group’s online service (Image service and logos): www.itella.fi/group/media.

Itella Group offers information and product flow management solutions. Itella is a communication, information logistics and logistics company doing business in Northern Europe, Central Europe and Russia. Itella employs approximately 31,700 people and its turnover in 2008 was EUR 1,953 million. The Group serves its corporate customers under the Itella brand and consumers in Finland under the Posti brand. Further information is available at www.itella.fi/group.